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SciPlay (SCPL) Moves 10.6% Higher: Will This Strength Last?

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SciPlay SCPL shares soared 10.6% in the last trading session to close at $16.98. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 11.1% loss over the past four weeks.

Shares of SciPlay appreciated after Scientific Games made an offer to SciPlay's board members to acquire the remaining 19% equity interest in SciPlay. Following the transaction, SciPlay will become a wholly-owned subsidiary of Scientific Games. Positive investor sentiments were witnessed as the transaction is likely to position SciPlay to accelerate its strategy and expand in the high growth casual gaming market as part of a combined company.

This digital games developer is expected to post quarterly earnings of $0.24 per share in its upcoming report, which represents a year-over-year change of -11.1%. Revenues are expected to be $152.91 million, down 7.7% 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 SciPlay, 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 SCPL 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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