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Strength Seen in Vertex (VERX): Can Its 9.8% Jump Turn into More Strength?

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Vertex (VERX) shares rallied 9.8% in the last trading session to close at $19.95. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 5.8% loss over the past four weeks.

Increased optimism over accelerated demand for the company’s cloud-based and on-premise solutions that can be tailored to specific industries for major lines of indirect tax, including sales and consumer use, value added and payroll due to the ongoing digital transformation drove the stock higher.

This company is expected to post quarterly earnings of $0.05 per share in its upcoming report, which represents a year-over-year change of -66.7%. Revenues are expected to be $104.92 million, up 10.9% 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 Vertex, 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 VERX 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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