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GreenSky (GSKY) Moves 53.2% Higher: Will This Strength Last?

GreenSky (GSKY) was a big mover last session on higher-than-average trading volume. The latest trend in earnings estimate revisions might help the sto...

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This story originally appeared on Zacks

GreenSky (GSKY) shares soared 53.2% in the trading session on Sep 15 to close at $11.90. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 2.5% loss over the past four weeks.

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This increased investor optimism can be attributed to the news of its merger with Goldman Sachs (GS) for $12.11 per share, representing a transaction value of $2.24 billion.

Price and Consensus

Price Consensus Chart for GSKY

This financial technology company is expected to post quarterly earnings of $0.13 per share in its upcoming report, which represents a year-over-year change of +333.3%. Revenues are expected to be $142.72 million, up 0.5% 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 GreenSky, the consensus EPS estimate for the quarter has been revised 26.7% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. However, as the stock is already near the offer price for its acquisition, the possibility of a price appreciation down the road is slim.

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 >>>>



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