Strength Seen in DMC Global (BOOM): Can Its 6.6% Jump Turn into More Strength?
DMC Global (BOOM) shares soared 6.6% in the last trading session to close at $18.64. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 10.2% loss over the past four weeks.
The stock gained primarily on optimism surrounding its third quarter 2022 results which is scheduled to be released on Nov 3, 2022. The company’s acquisition of 60% controlling interest in Arcadia Inc., a leading U.S. supplier of architectural building products, contributed $144.4 million to sales in the first six months of 2022, reflecting approximately 47% of its total sales. Arcadia is seeing strong demand from the commercial construction and high-end residential markets despite tight raw material supplies and is expected to have contributed to the third quarter results as well.
Apart from the accretive acquisition, BOOM’s results are constantly reflecting robust North American and international demand for well perforating products from DynaEnergetics, its energy products business. Pricing increases implemented to address the ongoing inflation in raw material costs also continue to aid margins.
This diversified holding company is expected to post quarterly earnings of $0.25 per share in its upcoming report, which represents a year-over-year change of +1150%. Revenues are expected to be $157.55 million, up 134.5% 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 DMC Global, 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 BOOM going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
DMC Global belongs to the Zacks Industrial Services industry. Another stock from the same industry, SiteOne Landscape (SITE), closed the last trading session 3.6% lower at $105.56. Over the past month, SITE has returned -1.6%.
For SiteOne Landscape , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.50. This represents a change of -13.8% from what the company reported a year ago. SiteOne Landscape currently has a Zacks Rank of #3 (Hold).
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