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Sapiens (SPNS) Soars 8.5%: Is Further Upside Left in the Stock?

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Sapiens (SPNS) shares ended the last trading session 8.5% higher at $22.06. 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 17.4% loss over the past four weeks.

Sapiens International extended its rally, driven by its strength in the key insurance markets like property and casualty (P&C), and life, pension and annuity (L&A). Further, solid momentum among tier two and tier three customers are contributing well to the company’s top-line growth. Additionally, well-performing core platform and expanding customer base remain noteworthy. Additionally, resilient balance sheet and robust cash flows are instilling investor optimism in the stock.

This provider of software and services to the insurance industry is expected to post quarterly earnings of $0.30 per share in its upcoming report, which represents a year-over-year change of +3.5%. Revenues are expected to be $123.85 million, up 8.3% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Sapiens, the consensus EPS estimate for the quarter has been revised 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 SPNS 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 >>>>

Sapiens is part of the Zacks Computer - Software industry. Commvault Systems (CVLT), another stock in the same industry, closed the last trading session 3% higher at $62.56. CVLT has returned -1.2% in the past month.

Commvault's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.63. Compared to the company's year-ago EPS, this represents a change of +1.6%. Commvault currently boasts a Zacks Rank of #3 (Hold).


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