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Revolve Group (RVLV) Surges 12.4%: Is This an Indication of Further Gains?

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Revolve Group (RVLV - Free Report) shares ended the last trading session 12.4% higher at $58.15. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 1.4% gain over the past four weeks.

The Revolve stock moved higher on better-than-expected first-quarter 2021 sales and earnings as well as optimism over reopening of economies and the return of social outings related styles to growth. The robust sales performance was driven by strong demand for beauty, sleep and casual wear, along with gains in the outing clothes. The company notes that customers preferred to spend the stimulus checks on discretionary items. Moreover, the company delivered substantial growth in operating cash flow. Looking into the second quarter, it notes that the sales momentum continued in April, outpacing the growth witnessed in the first quarter. Also, it is optimistic of the vaccination drive and sees significant recovery in the U.S. economy.

The company reported earnings of $0.30 per share that beat the Zacks Consensus Estimate of $0.13 and marked a substantial growth from $0.06 earned in the prior-year quarter. Total revenues of $178.9 million improved 22% year over year and surpassed the Zacks Consensus Estimate of $157 million.

Price and Consensus

Price Consensus Chart for RVLV

This online women's fashion retailer is expected to post quarterly earnings of $0.20 per share in its upcoming report, which represents no change from the year-ago quarter. Revenues are expected to be $172.97 million, up 21.1% 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 Revolve Group, the consensus EPS estimate for the quarter has been revised 5.3% 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 RVLV 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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