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Townsquare (TSQ) Moves 12.2% Higher: Will This Strength Last?

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Townsquare Media (TSQ - Free Report) shares soared 12.2% in the last trading session to close at $11.75. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 1.3% gain over the past four weeks.

The increase in share price can be attributed to Townsquare’s solid fourth-quarter 2020 results. Markedly, Townsquare Interactive added roughly 850 net subscribers during the quarter. Moreover, Townsquare Interactive net subscription revenues increased 16.3% year over year to $18.8 million. Adjusted EBITDA increased 8.4% to $27 million. Further, Townsquare provided optimistic revenue guidance for the first quarter of 2021, driven by strong growth in Townsquare Interactive subscription revenues.

Price and Consensus

Price Consensus Chart for Townsquare

This operator of radio stations in small and mid-sized markets is expected to post quarterly loss of $0.13 per share in its upcoming report, which represents a year-over-year change of -244.4%. Revenues are expected to be $87.63 million, down 6.2% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Townsquare, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on TSQ 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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