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Echo Global Logistics (ECHO) Surges 8.3%: Is This an Indication of Further Gains?

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Echo Global Logistics (ECHO - Free Report) shares soared 8.3% in the last trading session to close at $36.56. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 4.2% gain over the past four weeks.

The uptick is owing to the positive sentiment surrounding the transportation service providers as economic activities gather steam. In fact, shares of the company have displayed an uptrend (gaining 17.3%) ever since it delivered better-than-expected results for first-quarter 2021 on Apr 28.

Adding to this bullishness, management provided an upbeat outlook for revenues. It expects second-quarter revenues in the $830-$870 million band. The midpoint of the guided range indicates a 65% increase from the figure reported in second-quarter 2020.

Moreover, the company now expects current-year revenues to grow 29% from the 2020 reported levels, comparing favorably with the 15% increase expected earlier. The metric is envisioned within $3.15-$3.35 billion. The midpoint of this projection ($3.25 billion) is above the Zacks Consensus Estimate of $3.08 billion.

Price and Consensus

Price Consensus Chart for ECHO

This provider of supply-chain management services is expected to post quarterly earnings of $0.52 per share in its upcoming report, which represents a year-over-year change of +173.7%. Revenues are expected to be $850.29 million, up 65.2% 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 Echo Global Logistics, the consensus EPS estimate for the quarter has been revised 21.3% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on ECHO going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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