Owlet (OWLT) Surges 17.9%: Is This an Indication of Further Gains?

Owlet, Inc. (OWLT) shares soared 17.9% in the last trading session to close at $9.35. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 7.3% loss over the past four weeks.

The stock soared after investors viewed its $7.15-per-share public offering as a sign of strong institutional confidence and a catalyst for future growth.

This company is expected to post quarterly loss of $0.23 per share in its upcoming report, which represents a year-over-year change of -866.7%. Revenues are expected to be $26.55 million, up 20.1% 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 Owlet, 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 OWLT 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 >>>>

Owlet is part of the Zacks Technology Services industry. Distribution Solutions Group (DSGR), another stock in the same industry, closed the last trading session 2.4% higher at $30.28. DSGR has returned -0.7% in the past month.

Distribution Solutions' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.42. Compared to the company's year-ago EPS, this represents a change of +13.5%. Distribution Solutions currently boasts a Zacks Rank of #2 (Buy).

Zacks Names #1 Semiconductor Stock

This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.

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

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