Back to top

Image: Bigstock

Can EVOQUA WATR TEC (AQUA) Run Higher on Rising Earnings Estimates?

Read MoreHide Full Article

Investors might want to bet on EVOQUA WATR TEC (AQUA - Free Report) , as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

Analysts' growing optimism on the earnings prospects of this company 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. This insight is at the core of our stock rating tool -- the Zacks Rank.

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.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for EVOQUA WATR TEC, as there has been strong agreement among the covering analysts in raising estimates.

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 $0.08 per share for the current quarter represents a change of -11.11% from the number reported a year ago.

Over the last 30 days, one estimate has moved higher for EVOQUA WATR TEC compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 8.2%.

Current-Year Estimate Revisions

For the full year, the earnings estimate of $0.45 per share represents a change of +55.17% from the year-ago number.

The revisions trend for the current year also appears quite promising for EVOQUA WATR TEC, with one estimate moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 5.03%.

Favorable Zacks Rank

The promising estimate revisions have helped EVOQUA WATR TEC 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 EVOQUA WATR TEC have attracted decent investments and pushed the stock 13% 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.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Evoqua Water Technologies Corp. (AQUA) - free report >>

Published in