Strength Seen in Bright Health (BHG): Can Its 11.9% Jump Turn into More Strength?
Bright Health Group BHG shares soared 11.9% in the last trading session to close at $12.22. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3.1% gain over the past four weeks.
Bright Health scored a strong price increase, driven by optimism surrounding the company’s recent agreement to sell its California Medicare Advantage business, Brand New Day and Central Health Plan to Molina Healthcare, Inc.
The sale proceeds of $600 million will be used to satisfy the company’s obligations to its bank lenders, with the remaining proceeds used towards liabilities in its discontinued ACA insurance business. The transaction is expected to close by early 2024, subject to regulatory approval and other closing conditions.
This health insurer is expected to post quarterly loss of $5.45 per share in its upcoming report, which represents a year-over-year change of +84.9%. Revenues are expected to be $760.57 million, down 51.8% 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 Bright Health, 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 BHG 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 >>>>
Bright Health belongs to the Zacks Medical Services industry. Another stock from the same industry, Avantor, Inc. AVTR, closed the last trading session 1.8% higher at $20.54. Over the past month, AVTR has returned 1.4%.
For Avantor, Inc. , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.29. This represents a change of -21.6% from what the company reported a year ago. Avantor, Inc. currently has a Zacks Rank of #4 (Sell).
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