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Strength Seen in Plantronics (POLY): Can Its 52.6% Jump Turn into More Strength?

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Plantronics shares ended the last trading session 52.6% higher at $39.99. 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 5.5% loss over the past four weeks.

The rally came after Plantronics announced a deal under which it will be acquired by HP for $40 per share in cash, representing a total enterprise value of $3.3 billion. The acquisition accelerates HP’s growth strategy and creates a leading portfolio of hybrid work solutions. Poly’s leading-edge technology and go-to-market strategy will help to drive HP’s long-term growth. The deal, subject to Poly shareholder and regulatory approvals, is expected to be closed by the end of calendar year 2022.

This headset maker is expected to post quarterly earnings of $0.54 per share in its upcoming report, which represents a year-over-year change of -56.1%. Revenues are expected to be $424.04 million, down 11% 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 Plantronics, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on POLY 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 >>>>

Plantronics belongs to the Zacks Communication - Components industry. Another stock from the same industry, Harmonic (HLIT - Free Report) , closed the last trading session 0.3% lower at $9.29. Over the past month, HLIT has returned 0.1%.

Harmonic's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.04. Compared to the company's year-ago EPS, this represents no change. Harmonic currently boasts a Zacks Rank of #4 (Sell).


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