Universal Stainless (USAP) Moves 7.4% Higher: Will This Strength Last?
Universal Stainless & Alloy Products (USAP) shares rallied 7.4% in the last trading session to close at $20.13. 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 10% gain over the past four weeks.
Universal Stainless’ share price has been on an uptrend since the company reported solid third-quarter 2023 results. The company reported earnings per share of 20 cents in the quarter, which marked a turnaround performance from the loss of 14 cents per share in the third quarter of 2022. Sales increased 54% year over year to $71.3 million, the second-highest level achieved by the company.
USAP’s gross margin was 15.2%, the highest since the second quarter of 2018. The improvement was attributed to a richer product mix and higher selling prices.
Premium alloys’ sales surged 106% year over year to $16.5 million, mainly driven by increased aerospace demand. Aerospace also led to 42% growth in Specialty alloys sales in the quarter. The company’s solid backlog suggests improved results in the fourth quarter as well. USAP had guided further sequential growth in the fourth quarter along with record sales and strengthened profitability for the full year 2023.
This specialty steel maker is expected to post quarterly earnings of $0.27 per share in its upcoming report, which represents a year-over-year change of +165.9%. Revenues are expected to be $73.16 million, up 30.2% 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 Universal Stainless, 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 USAP going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Universal Stainless belongs to the Zacks Steel - Producers industry. Another stock from the same industry, Steel Dynamics (STLD), closed the last trading session 0.5% lower at $121.25. Over the past month, STLD has returned 5.7%.
Steel Dynamics' consensus EPS estimate for the upcoming report has changed +6.8% over the past month to $2.45. Compared to the company's year-ago EPS, this represents a change of -43.9%. Steel Dynamics currently boasts a Zacks Rank of #2 (Buy).
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Universal Stainless & Alloy Products, Inc. (USAP) : Free Stock Analysis Report
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