TSS (TSSI) Surges 19.5%: Is This an Indication of Further Gains?

TSS Inc. (TSSI) shares soared 19.5% in the last trading session to close at $14.84. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3.9% gain over the past four weeks.

TSS stock surged as it is benefiting from rising demand for AI infrastructure and data center services, driving growth expectations. The rally also reflects improving fundamentals, including higher-margin projects and stronger demand in high-performance computing.

This company is expected to post quarterly earnings of $0.04 per share in its upcoming report, which represents a year-over-year change of -66.7%. Revenues are expected to be $45.69 million, down 53.8% 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 TSS, the consensus EPS estimate for the quarter has been revised 50% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on TSSI going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

TSS is part of the Zacks Engineering - R and D Services industry. Mayville Engineering (MEC), another stock in the same industry, closed the last trading session 2.1% higher at $20.9. MEC has returned 22.9% in the past month.

For Mayville Engineering, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.28. This represents a change of -800% from what the company reported a year ago. Mayville Engineering 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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