DoubleDown Interactive (DDI) Stock Jumps 19.6%: Will It Continue to Soar?

DoubleDown Interactive Co., Ltd. Sponsored ADR (DDI) shares rallied 19.6% in the last trading session to close at $10.99. 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 8.8% gain over the past four weeks.

DoubleDown Interactive surged after its majority owner, DoubleU Games, proposed buying the remaining publicly held shares for $11.25 per ADS in cash. The offer represented a sizable premium to the prior share price, prompting investors to reprice the stock closer to the proposed takeover value.

This company is expected to post quarterly earnings of $0.58 per share in its upcoming report, which represents a year-over-year change of +20.8%. Revenues are expected to be $94.11 million, up 12.7% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For DoubleDown Interactive, 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 DDI 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 >>>>

DoubleDown Interactive is a member of the Zacks Gaming industry. One other stock in the same industry, Nintendo Co. (NTDOY), finished the last trading session 1.4% lower at $12.21. NTDOY has returned -12.6% over the past month.

For Nintendo, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.09. This represents a change of +50% from what the company reported a year ago. Nintendo 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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