Extended Stay America shares soared 13.4% in the last trading session to close at $19.21. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 11.7% gain over the past four weeks.

Shares of Extended Stay America appreciated after the news that it recently reached an agreement to be acquired by a 50/50 joint venture comprising Blackstone and Starwood Capital Group. Per the agreement, Extended Stay shareholders will receive $19.50 per paired share, which is 15.1% over the closing stock price on Mar 12, 2021. The value of the deal is nearly $6 billion.

Price and Consensus

This hotel operator is expected to post quarterly loss of $0.02 per share in its upcoming report, which represents a year-over-year change of -128.6%. Revenues are expected to be $253.07 million, down 5% 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 Extended Stay America, the consensus EPS estimate for the quarter has been revised 147.6% 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 STAY 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 >>>>