Magnachip MX shares soared 23% in the last trading session to close at $5.25. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 50.4% gain over the past four weeks.
MX shares are benefitting from a sharp acceleration in new-generation power product launches, which reinforces the company's pure-play power pivot and signals improving revenue mix and margin recovery potential.
This chip products maker is expected to post quarterly loss of $0.22 per share in its upcoming report, which represents a year-over-year change of -120%. Revenues are expected to be $46 million, up 2.9% 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 Magnachip, 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 MX going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Magnachip belongs to the Zacks Semiconductor - Analog and Mixed industry. Another stock from the same industry, M/A-Com MTSI, closed the last trading session 1.1% higher at $287.64. Over the past month, MTSI has returned 24.5%.
For M/A-Com, the consensus EPS estimate for the upcoming report has changed -0.2% over the past month to $1.07. This represents a change of +25.9% from what the company reported a year ago. M/A-Com currently has a Zacks Rank of #2 (Buy).
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Magnachip Semiconductor Corp. (MX): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).