Cerence (CRNC - Free Report) 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.
Analysts' growing optimism on the earnings prospects of this automotive artificial intelligence developer is driving estimates higher, which 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 Cerence, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.
Current-Quarter Estimate Revisions
For the current quarter, the company is expected to earn $0.90 per share, which is a change of +150% from the year-ago reported number.
Over the last 30 days, two estimates have moved higher for Cerence compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 2142.86%.
Current-Year Estimate Revisions
The company is expected to earn $1.44 per share for the full year, which represents a change of +300% from the prior-year number.
The revisions trend for the current year also appears quite promising for Cerence, with one estimate moving higher over the past month compared to one negative revision. The consensus estimate has also received a boost over this time frame, increasing 100%.
Favorable Zacks Rank
The promising estimate revisions have helped Cerence 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.
Bottom Line
While strong estimate revisions for Cerence have attracted decent investments and pushed the stock 7.7% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.2% per year. So be sure to give these hand picked 7 your immediate attention.
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Cerence (CRNC - Free Report) 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.
Analysts' growing optimism on the earnings prospects of this automotive artificial intelligence developer is driving estimates higher, which 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 Cerence, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.
Current-Quarter Estimate Revisions
For the current quarter, the company is expected to earn $0.90 per share, which is a change of +150% from the year-ago reported number.
Over the last 30 days, two estimates have moved higher for Cerence compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 2142.86%.
Current-Year Estimate Revisions
The company is expected to earn $1.44 per share for the full year, which represents a change of +300% from the prior-year number.
The revisions trend for the current year also appears quite promising for Cerence, with one estimate moving higher over the past month compared to one negative revision. The consensus estimate has also received a boost over this time frame, increasing 100%.
Favorable Zacks Rank
The promising estimate revisions have helped Cerence 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.
Bottom Line
While strong estimate revisions for Cerence have attracted decent investments and pushed the stock 7.7% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.2% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
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