Strength Seen in Daqo (DQ): Can Its 15.2% Jump Turn into More Strength?

Daqo New Energy (DQ) shares rallied 15.2% in the last trading session to close at $23.24. 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 5.1% loss over the past four weeks.

DAQO New Energy is recognized as one of the world’s lowest-cost producers, which allows for competitive pricing even in challenging market environments.

As a leading manufacturer of high-purity polysilicon, the company is benefiting from the growing demand for higher-efficiency N-type solar technology, which is essential for advanced solar cells.

This solar panel parts maker is expected to post quarterly loss of $0.13 per share in its upcoming report, which represents a year-over-year change of +87.9%. Revenues are expected to be $225 million, up 81.6% 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 Daqo, 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 DQ 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 >>>>

Daqo is a member of the Zacks Solar industry. One other stock in the same industry, Array Technologies, Inc. (ARRY), finished the last trading session 6.7% higher at $8.08. ARRY has returned 4.6% over the past month.

Array Technologies' consensus EPS estimate for the upcoming report has changed -8.6% over the past month to -$0.06. Compared to the company's year-ago EPS, this represents a change of -146.2%. Array Technologies currently boasts a Zacks Rank of #3 (Hold).

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

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