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ARKO Corp. (ARKO) Moves 6% Higher: Will This Strength Last?

ARKO Corp. (ARKO) shares ended the last trading session 6% higher at $9.86. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 2.4% loss over the past four weeks.

Shares of ARKO Corp. got a boost as the company announced that its wholly owned subsidiary, GPM Investments, LLC (“GPM”) agreed to buy Pride Convenience Holdings, LLC (“Pride”) – operator of 31 convenience stores in supreme locations. This buyout is likely to expand ARKO’s convenience store foothold into Massachusetts. The buyout is expected to augment ARKO’s adjusted EBITDA by nearly $12.2 million on an annual run rate basis.

This company is expected to post quarterly earnings of $0.22 per share in its upcoming report, which represents a year-over-year change of -12%. Revenues are expected to be $2.51 billion, up 23.5% 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 ARKO Corp., 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 ARKO 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 >>>>

ARKO Corp. is part of the Zacks Consumer Products - Staples industry. RH (RH), another stock in the same industry, closed the last trading session 2.5% lower at $234.46. RH has returned -2.5% in the past month.

For RH , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $4.78. This represents a change of -32% from what the company reported a year ago. RH currently has a Zacks Rank of #3 (Hold).

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