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Ashford (AINC) Surges 16%: Is This an Indication of Further Gains?

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Ashford (AINC) shares ended the last trading session 16% higher at $20.08. 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 102% gain over the past four weeks.

Ashford extended its rally for the sixth consequent day and touched a new 52-week high of $21.20. The company recently posted a comprehensive presentation for its investors. The presentation offered operational, financial and strategic updates related to the company and two of its market leading portfolio companies – Ashford Hospitality Trust AHT and Braemar Hotels & Resorts BHR.

Per the presentation, Ashford’s expansion strategy includes improving hospitality AUM balance, growing third party business, acquisition or incubation of additional operations and expanding service offerings to third parties. The company projects adjusted EBITDA to be approximately $85 million in 2025, driven by the above-mentioned growth initiatives.

Further, the company anticipates third-party revenues as a percent of total revenues to improve from 44% in 2019 to 54% by 2025. Thus, the upbeat guidance provided by Ashford led to bullish investor sentiments and drove the stock.

Price and Consensus

Price Consensus Chart for AINC
Price Consensus Chart for AINC

This asset management company serving the hospitality industry is expected to post quarterly earnings of $0.42 per share in its upcoming report, which represents a year-over-year change of +250%. Revenues are expected to be $64.3 million, up 41% 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 Ashford, 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 AINC 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 >>>>

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Ashford Hospitality Trust Inc (AHT) : Free Stock Analysis Report

Ashford Inc. (AINC) : Free Stock Analysis Report

BRAEMAR HOTELS & RESORTS INC. (BHR) : Free Stock Analysis Report

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