A-Mark (AMRK) Soars 5.9%: Is Further Upside Left in the Stock?
A-Mark Precious Metals (AMRK) shares ended the last trading session 5.9% higher at $48.12. 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 20.3% gain over the past four weeks.
A-Mark shares gained on the news of its strongest quarter of financial performance in the company’s history. Revenues crossed the $2 billion mark and the company reported record earnings in third-quarter fiscal 2021 (ended Mar 31, 2021). This was aided by robust market conditions and the completion of acquisition of JM Bullion (“JMB”) — touted to be the most significant acquisition in A-Mark’s history.
The previously announced acquisition of JMB, a leading internet retailer of precious metals, was completed on Mar 19, 2021. Notably, JMB contributed $8.5 million of gross profit and $6.8 million of pre-tax income to A-Mark’s Direct-to-Consumer segment in the last 12 days of March following the acquisition.
Revenues in the reported quarter surged 63% to $2.05 billion from the prior-year quarter owing to increased amount of gold and silver ounces sold, and higher average selling prices of gold and silver. A-Mark reported earnings per share of $8.84 in third-quarter fiscal 2021, indicating a whopping improvement of 449% from the prior-year quarter. The company remains optimistic that it will continue to benefit from the sustained rally in the precious metals market.
Price and Consensus
This precious metals trading company is expected to post quarterly earnings of $2.60 per share in its upcoming report, which represents a year-over-year change of +4.4%. Revenues are expected to be $1.8 billion, up 7.8% 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 A-Mark, the consensus EPS estimate for the quarter has been revised 205.9% 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 AMRK 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 >>>>
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AMark Precious Metals, Inc. (AMRK) : Free Stock Analysis Report
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