Simply Good Foods (SMPL) Moves 6.9% Higher: Will This Strength Last?
Simply Good Foods (SMPL) shares soared 6.9% in the last trading session to close at $33.75. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 6.4% gain over the past four weeks.
Shares of Simply Good Foods have been gaining on the optimism surrounding consumers’ rising demand in the health and wellness space, as well as for convenient on-the-go nutrition options. To this end, the company’s Atkins and Quest brands have been performing well, and are strongly aligned with consumers’ evolving trends. Additionally, robust e-commerce growth has been a major driver, which along with solid retail takeaway and favorable shipment timings helped Simply Good Foods witness sequential improvements in earnings and sales in the last reported quarter. Incidentally, e-commerce consumption surged 45% in first-quarter fiscal 2021 and management expects solid growth in this channel in the second quarter.
Price and Consensus
This nutritional foods company is expected to post quarterly earnings of $0.22 per share in its upcoming report, which represents a year-over-year change of -4.4%. Revenues are expected to be $229.41 million, up 1% 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 Simply Good Foods, 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 SMPL 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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