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Earnings Estimates Rising for Camtek (CAMT): Will It Gain?

Camtek (CAMT) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.

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This story originally appeared on Zacks

Camtek (CAMT) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.

- Zacks

The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this maker of automatic optical inspection and process enhancement systems, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Camtek, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

For the current quarter, the company is expected to earn $0.41 per share, which is a change of +127.78% from the year-ago reported number.

Over the last 30 days, three estimates have moved higher for Camtek compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 5.41%.

Current-Year Estimate Revisions

The company is expected to earn $1.53 per share for the full year, which represents a change of +142.86% from the prior-year number.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, three estimates have moved up for Camtek versus no negative revisions. This has pushed the consensus estimate 7.98% higher.

Favorable Zacks Rank

The promising estimate revisions have helped Camtek earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Investors have been betting on Camtek because of its solid estimate revisions, as evident from the stock's 7.2% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.



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Camtek Ltd. (CAMT): Free Stock Analysis Report

 

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