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RadNet (RDNT) Soars 10%: Is Further Upside Left in the Stock?

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RadNet (RDNT - Free Report) shares rallied 10% in the last trading session to close at $32.55. 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 29.8% gain over the past four weeks.

This marks the third consecutive trading day of RadNet’s price increase driven by the optimism surrounding the company’s solid performance in its first-quarter 2021 results. The encouraging performance came on the back of a combination of several factors – cost savings measures made during the pandemic, certain investments (especially in 3D mammography) and return to more normalized procedural volumes. Additionally, the company’s raised full year 2021 revenue guidance (compared to the prior announcement) also contributed to the price appreciation.

This operator of medical diagnostic imaging centers is expected to post quarterly earnings of $0.14 per share in its upcoming report, which represents a year-over-year change of +187.5%. Revenues are expected to be $326.78 million, up 71.5% 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 RadNet, the consensus EPS estimate for the quarter has been revised 9.7% 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 RDNT 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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