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Change Healthcare (CHNG) Soars 6.4%: Is Further Upside Left in the Stock?

Change Healthcare (CHNG) shares ended the last trading session 6.4% higher at $27.11. 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 2.9% gain over the past four weeks.

Change Healthcare's shares gained following favorable ruling from a U.S. district court in a pending litigation related to its acqusition by UnitedHealth Group.

This health care technology company is expected to post quarterly earnings of $0.24 per share in its upcoming report, which represents a year-over-year change of -31.4%. Revenues are expected to be $831.51 million, up 0.6% 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 Change Healthcare, the consensus EPS estimate for the quarter has been revised 12.8% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on CHNG 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 >>>>

Change Healthcare belongs to the Zacks Medical Info Systems industry. Another stock from the same industry, Outset Medical, Inc. (OM), closed the last trading session 0.9% lower at $17.40. Over the past month, OM has returned -8.7%.

For Outset Medical, Inc. , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.71. This represents a change of -20.3% from what the company reported a year ago. Outset Medical, Inc. currently has a Zacks Rank of #3 (Hold).

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