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Amplify Energy (AMPY) Soars 8.1%: Is Further Upside Left in the Stock?

Amplify Energy (AMPY) saw its shares surge in the last session with trading volume being higher than average. The latest trend in earnings estimate revisions may not translate into further...

This story originally appeared on Zacks

Amplify Energy (AMPY) shares rallied 8.1% in the last trading session to close at $5.75. 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 39.3% gain over the past four weeks.

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Amplify Energy extended its rally for the ninth straight day, driven by optimism over rising commodity prices spurred by widespread COVID-19 vaccine rollouts, the ongoing government stimulus and an improving demand picture. The recovery in crude prices to over $75 a barrel and natural gas surging to seven-year highs has lifted the energy space and contributed to the strength in Amplify Energy, an upstream operator in Oklahoma, the Rockies, offshore Southern California, East Texas / North Louisiana, and the Eagle Ford.

This oil and gas company is expected to post quarterly earnings of $0.18 per share in its upcoming report, which represents a year-over-year change of +300%. Revenues are expected to be $66.07 million, up 25.3% 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 Amplify Energy, 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 AMPY 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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