Arcos Dorados (ARCO) shares soared 6% in the last trading session to close at $9.5. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 16.7% gain over the past four weeks.
Arcos Dorados is benefiting from strong same-store sales growth driven by menu innovation and value offerings across its core markets. The company is also gaining from digital expansion, delivery growth, and strategic restaurant openings, supporting traffic and revenue momentum.
This restaurant owner is expected to post quarterly earnings of $0.10 per share in its upcoming report, which represents a year-over-year change of +42.9%. Revenues are expected to be $1.2 billion, up 11.3% 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 Arcos Dorados, 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 ARCO 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 >>>>
Arcos Dorados belongs to the Zacks Retail - Restaurants industry. Another stock from the same industry, The ONE Group Hospitality, Inc. (STKS), closed the last trading session 1.7% higher at $1.78. Over the past month, STKS has returned -8.4%.
For The ONE Group Hospitality, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.12. This represents a change of -14.3% from what the company reported a year ago. The ONE Group Hospitality currently has a Zacks Rank of #4 (Sell).
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.
See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Arcos Dorados Holdings Inc. (ARCO): Free Stock Analysis Report
The ONE Group Hospitality, Inc. (STKS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).