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Zebra (ZBRA) Surges 4.1%: Is This an Indication of Further Gains?

Zebra (ZBRA) 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 price...

This story originally appeared on Zacks

Zebra Technologies Corporation (ZBRA) shares rallied 4.1% in the last trading session to close at $606.33. 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 1.4% loss over the past four weeks.

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Zebra’s rally is primarily driven by optimism over the company’s strong momentum in its automation solution business. Strength across the manufacturing and warehousing end markets, backed by healthy demand for its enterprise mobile computing and intelligent automation solutions, bodes well for the company.

This producer of printers for bar codes, plastic cards and, radio-frequency identification tags is expected to post quarterly earnings of $4.32 per share in its upcoming report, which represents a year-over-year change of -3.1%. Revenues are expected to be $1.45 billion, up 10.6% 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 Zebra, 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 ZBRA 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 >>>>

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