Back to top

Image: Bigstock

Can The Pennant Group, Inc. (PNTG) Run Higher on Rising Earnings Estimates?

Read MoreHide Full Article

The Pennant Group, Inc. (PNTG - Free Report) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.

The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, 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 The Pennant Group, Inc. 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

For the current quarter, the company is expected to earn $0.18 per share, which is a change of +12.5% from the year-ago reported number.

Over the last 30 days, the Zacks Consensus Estimate for The Pennant Group, Inc. has increased 28.57% because one estimate has moved higher compared to no negative revisions.

Current-Year Estimate Revisions

The company is expected to earn $0.67 per share for the full year, which represents a change of +9.84% from the prior-year number.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for The Pennant Group, Inc. Over the past month, one estimate has moved higher compared to no negative revisions, helping the consensus estimate increase 26.42%.

Favorable Zacks Rank

Thanks to promising estimate revisions, The Pennant Group, Inc. currently carries 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

Investors have been betting on The Pennant Group, Inc. because of its solid estimate revisions, as evident from the stock's 33.2% gain over the past four weeks. As its earnings growth prospects might push the stock higher, 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:


The Pennant Group, Inc. (PNTG) - free report >>

Published in