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Apollo Endosurgery, Inc. (APEN) Moves 7% Higher: Will This Strength Last?

Apollo Endosurgery, Inc. (APEN) 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...

This story originally appeared on Zacks

Apollo Endosurgery, Inc. (APEN) shares ended the last trading session 7% higher at $8.43. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 6.3% loss over the past four weeks.

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The stock scored a strong price increase for the third consecutive day driven by the optimism surrounding the company’s encouraging third-quarter 2021 results, with the reported net loss being 23.3% narrower than the Zacks Consensus Estimate. Revenues too surpassed the mark by 0.93%. The market is also upbeat about the recent closure of a follow-on equity offering that generated approximately $69.9 million net proceeds to support continued growth-related investments and expand the institutional shareholder base.

This company is expected to post quarterly loss of $0.20 per share in its upcoming report, which represents a year-over-year change of -42.9%. Revenues are expected to be $16.75 million, up 30.3% 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 Apollo Endosurgery, Inc., the consensus EPS estimate for the quarter has been revised 1.7% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on APEN 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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