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Strength Seen in The RealReal (REAL): Can Its 7.8% Jump Turn into More Strength?

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The RealReal (REAL - Free Report) shares ended the last trading session 7.8% higher at $8.26. 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 12.2% loss over the past four weeks.

Shares of RealReal have been getting a boost from the company’s solid operations, which are largely backed by its focus on technological innovation. The company recently released strong fourth-quarter 2021 results, wherein management stated that its technology innovations have been helping the company enhance unit economics; scale business and drive greater selling prices. Management also stated that it expects a robust 2022 performance. During the fourth quarter of 2021, the company witnessed solid top-line advancement as well as lower operating expenses across all major areas of the business.

This online luxury consignment site is expected to post quarterly loss of $0.51 per share in its upcoming report, which represents a year-over-year change of -4.1%. Revenues are expected to be $138.33 million, up 40% 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 The RealReal, the consensus EPS estimate for the quarter has been revised 35.6% 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 REAL 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 >>>>

The RealReal belongs to the Zacks Consumer Products - Discretionary industry. Another stock from the same industry, Central Garden (CENT - Free Report) , closed the last trading session 0.8% higher at $46.72. Over the past month, CENT has returned -0.2%.

For Central Garden, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.18. This represents a change of -10.6% from what the company reported a year ago. Central Garden currently has a Zacks Rank of #2 (Buy).


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