Can Falcon Minerals (FLMN) Run Higher on Rising Earnings Estimates?
Falcon Minerals (FLMN) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.
Falcon Minerals (FLMN) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.
The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this company, 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 Falcon Minerals, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates 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
The earnings estimate of $0.11 per share for the current quarter represents a change of +1000% from the number reported a year ago.
Over the last 30 days, one estimate has moved higher for Falcon Minerals compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 14.29%.
Current-Year Estimate Revisions
For the full year, the earnings estimate of $0.26 per share represents a change of +420% from the year-ago number.
In terms of estimate revisions, the trend for the current year also appears quite encouraging for Falcon Minerals. Over the past month, one estimate has moved higher compared to no negative revisions, helping the consensus estimate increase 14.71%.
Favorable Zacks Rank
The promising estimate revisions have helped Falcon Minerals 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.
Falcon Minerals shares have added 35.9% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.
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