SPS Commerce (SPSC) Surges 7.1%: Is This an Indication of Further Gains?

SPS Commerce (SPSC) shares rallied 7.1% in the last trading session to close at $82.68. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 2.7% loss over the past four weeks.

The stock rallied following reports that SPS Commerce is in advanced buyout talks with private equity firm GTCR.

This provider of supply chain software services to businesses is expected to post quarterly earnings of $1.22 per share in its upcoming report, which represents a year-over-year change of +8%. Revenues are expected to be $197.31 million, up 3.9% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For SPS Commerce, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on SPSC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

SPS Commerce is part of the Zacks Business - Services industry. Concentrix Corporation (CNXC), another stock in the same industry, closed the last trading session 4.6% higher at $28.24. CNXC has returned 8.6% in the past month.

For Concentrix, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $2.71. This represents a change of -2.5% from what the company reported a year ago. Concentrix currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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