Callaway Golf (CALY) shares soared 7.4% in the last trading session to close at $15.36. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 4.4% gain over the past four weeks.
Callaway Golf is benefiting from growth in its higher-margin segments, particularly apparel and active lifestyle businesses, which are helping offset weakness in golf equipment sales. The company is also gaining from its diversified revenue base and ongoing cost control efforts, supporting overall stability despite the recent decline in equipment sales.
This maker of golf equipment and accessories is expected to post quarterly earnings of $0.42 per share in its upcoming report, which represents a year-over-year change of +281.8%. Revenues are expected to be $650.85 million, down 40.4% 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 Callaway, the consensus EPS estimate for the quarter has been revised 12.1% 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 CALY 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 >>>>
Callaway is part of the Zacks Leisure and Recreation Products industry. MasterCraft Boat Holdings, Inc. (MCFT), another stock in the same industry, closed the last trading session 6.3% higher at $23.4. MCFT has returned 8.3% in the past month.
MasterCraft Boat Holdings, Inc.'s consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.36. Compared to the company's year-ago EPS, this represents a change of +20%. MasterCraft Boat Holdings, Inc. currently boasts a Zacks Rank of #3 (Hold).
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Callaway Golf Company (CALY): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).