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Strength Seen in ChampionX (CHX): Can Its 9.6% Jump Turn into More Strength?

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ChampionX (CHX - Free Report) shares rallied 9.6% in the last trading session to close at $23.41. 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 10.3% loss over the past four weeks.

ChampionX stock ended sharply higher on Monday, driven by optimism over crude prices spurred by a supportive macro backdrop, geopolitical tensions and the OPEC+ supply curtailments. The steady increase in commodity prices to more than $100 a barrel has lifted drilling demand higher and contributed to the strength in ChampionX, which provides equipment and technologies to the oil producers. The company’s shares have also been buoyed by the recent $250 million stock repurchase announcement.

This oil and gas drilling technology company is expected to post quarterly earnings of $0.22 per share in its upcoming report, which represents a year-over-year change of +175%. Revenues are expected to be $815.95 million, up 19.1% 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 ChampionX, the consensus EPS estimate for the quarter has been revised 19% 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 CHX 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 >>>>

ChampionX is a member of the Zacks Engineering - R and D Services industry. One other stock in the same industry, Atlas Technical Consultants, Inc. (ATCX - Free Report) , finished the last trading session 1.4% lower at $10.84. ATCX has returned 11.6% over the past month.

For Atlas Technical Consultants, Inc., the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.14. This represents a change of +132.6% from what the company reported a year ago. Atlas Technical Consultants, Inc. currently has a Zacks Rank of #3 (Hold).

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