Fabrinet (FN) Soars 5.7%: Is Further Upside Left in the Stock?
Fabrinet FN shares soared 5.7% in the last trading session to close at $167.90. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 0.4% gain over the past four weeks.
The upswing in share price can be attributed to strong demand for its datacom products.
This company that assembles optical, electro-mechanical and electronic devices for other companies is expected to post quarterly earnings of $1.87 per share in its upcoming report, which represents a year-over-year change of -5.1%. Revenues are expected to be $659.33 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 Fabrinet, 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 FN going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Fabrinet is a member of the Zacks Electronics - Miscellaneous Components industry. One other stock in the same industry, Novanta NOVT, finished the last trading session 5.1% higher at $144.01. NOVT has returned -16.4% over the past month.
For Novanta , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.74. This represents a change of -8.6% from what the company reported a year ago. Novanta currently has a Zacks Rank of #4 (Sell).
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