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Regional Management (RM) Surges 10.1%: Is This an Indication of Further Gains?

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Regional Management (RM) shares soared 10.1% in the last trading session to close at $42.92. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 10.8% gain over the past four weeks.

The upswing in share price came after Regional Management delivered an earnings surprise of 96% in first-quarter 2021 on higher interest income. Also, the bottom line compares favorably with loss reported in the year-ago quarter. Moreover, the company announced a dividend hike and authorized a new stock repurchase program. Also, the stock touched a new 52-week high of $43.28 on the day.

Price and Consensus

Price Consensus Chart for RM
Price Consensus Chart for RM

This financial services company is expected to post quarterly earnings of $1.02 per share in its upcoming report, which represents a year-over-year change of +50%. Revenues are expected to be $93.46 million, up 4% 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 Regional Management, the consensus EPS estimate for the quarter has been revised 1.5% 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 RM 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 >>>>


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