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DigitalBridge (DBRG) Moves 5.3% Higher: Will This Strength Last?

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DigitalBridge (DBRG - Free Report) shares rallied 5.3% in the last trading session to close at $6.42. 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 8.6% loss over the past four weeks.

DigitalBridge had an extended rally for the second consecutive day, driven by continued optimism in the Data-center and tower REIT industry. Robust growth in cloud computing, the Internet of Things and big data, and a greater call for third-party IT infrastructure are spurring the demand for data-center infrastructure. As an infrastructure provider for the rapidly-growing digital economy, this data-center landlord is well placed for sustainable growth on the back of increased investment by wireless carriers in 4G LTE and 5G networks.

This provider of asset management services to NorthStar Realty Finance Corp. is expected to post quarterly funds from operations (FFO) of $0.02 per share in its upcoming report, which represents a year-over-year change of +109.1%. Revenues are expected to be $243.04 million, up 1539.9% from the year-ago quarter.

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

For DigitalBridge, the consensus FFO per share estimate for the quarter has been revised 25% higher over the last 30 days to the current level. And a positive trend in the FFO estimate revision usually translates into price appreciation. So, make sure to keep an eye on DBRG 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 >>>>

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.


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