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Preferred Apartment Communities (APTS) Stock Jumps 11.5%: Will It Continue to Soar?

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Preferred Apartment Communities (APTS) shares soared 11.5% in the last trading session to close at $9.19. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 12.6% gain over the past four weeks.

This increased optimism can be attributed to Preferred Apartment Communities’ better-than-expected fourth-quarter 2020 results, which were backed by physical occupancy gains in its same-store multifamily communities. The company revealed core fund from operations (FFO) per share of 31 cents, surpassing the Zacks Consensus Estimate of 20 cents. The market is also upbeat about the company’s encouraging guidance for 2021 multifamily communities’ same-store net operating income growth.

Price and Consensus

Price Consensus Chart for Preferred Apartment Communities
Price Consensus Chart for Preferred Apartment Communities

This real estate investment trust is expected to post quarterly FFO of $0.21 per share in its upcoming report, which represents a year-over-year change of -32.3%. Revenues are expected to be $118.85 million, down 9.3% from the year-ago quarter.

While FFO and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in FFO estimate revisions and near-term stock price movements.

For Preferred Apartment Communities, the consensus FFO estimate for the quarter has been revised 2.4% lower over the last 30 days to the current level. And a negative trend in FFO estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on APTS 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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