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Strength Seen in GreenSky (GSKY): Can Its 5.1% Jump Turn into More Strength?

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GreenSky (GSKY - Free Report) shares soared 5.1% in the last trading session to close at $6.16. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.7% gain over the past four weeks.

GreenSky extended its rally for the third straight day, driven by accelerated optimism over growth prospects of the FinTech industry. COVID-19 has been beneficial for the industry as usage of financial apps has increased dramatically all over the world. Rapid continued adoption of FinTech apps bodes well for industry participants including GreenSky.

Markedly, GreenSky is set to report its fourth-quarter 2020 results on Mar 10. In the third quarter, transaction volume increased 9% sequentially. The trend is expected to have continued in the fourth quarter given the company’s strong network of merchants.

Price and Consensus

Price Consensus Chart for GreenSky

This financial technology company is expected to post quarterly earnings of $0.07 per share in its upcoming report, which represents a year-over-year change of -41.7%. Revenues are expected to be $124.78 million, down 6.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For GreenSky, the consensus EPS estimate for the quarter has been revised 94.4% 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 GSKY going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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