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Will Mesa Air (MESA) Gain on Rising Earnings Estimates?

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Mesa Air (MESA - 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.

Analysts' growing optimism on the earnings prospects of this regional airline 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 Mesa Air, 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 $0.46 per share, which is a change of +820% from the year-ago reported number.

The Zacks Consensus Estimate for Mesa Air has increased 753.57% over the last 30 days, as two estimates have gone higher compared to no negative revisions.

Current-Year Estimate Revisions

The company is expected to earn $0.99 per share for the full year, which represents a change of +26.92% from the prior-year number.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, four estimates have moved up for Mesa Air versus no negative revisions. This has pushed the consensus estimate 175.8% higher.

Favorable Zacks Rank

Thanks to promising estimate revisions, Mesa Air 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

While strong estimate revisions for Mesa Air have attracted decent investments and pushed the stock 88.1% 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.


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