Cubic shares rallied 7.9% in the last trading session to close at $75.20. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 0.7% gain over the past four weeks.
Cubic extended its rally, driven by the acquisition proposal that it has received from Singapore Technologies Engineering. In the proposal, the latter is ready to buy all of Cubic’s outstanding stock at $76 per share in cash. This represents a premium of 8.6% over the acquisition offer given by Veritas Capital and Elliott Management last month to acquire Cubic’s stock at $70 per share in cash. Further, Singapore Technologies is planning to sell CMPS business of Cubic post the buyout.
Price and Consensus
This electronics company is expected to post quarterly earnings of $0.35 per share in its upcoming report, which represents a year-over-year change of +391.7%. Revenues are expected to be $335.09 million, up 4.2% 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 Cubic, 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 CUB 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 >>>>