Back to top

Image: Bigstock

Earthstone Energy (ESTE) Stock Jumps 10.8%: Will It Continue to Soar?

Read MoreHide Full Article

Earthstone Energy shares rallied 10.8% in the last trading session to close at $16.27. 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 23.1% loss over the past four weeks.

The share price of Earthstone Energy extended its rally for the second straight day. The bullishness was driven by the company announcing the acquisition of assets worth $627 million in New Mexico which would result in ESTE owning low-cost, high-margin producing assets generating significant free cash flow, indicating improved profitability going ahead. Additionally, improved market conditions and soaring energy prices have also added strength to Earthstone, an independent energy company engaged in developing and operating oil and gas properties.

This oil and gas company is expected to post quarterly earnings of $1.10 per share in its upcoming report, which represents a year-over-year change of +323.1%. Revenues are expected to be $326.77 million, up 264.4% 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 Earthstone Energy, 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 ESTE 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 >>>>

Earthstone Energy is a member of the Zacks Oil and Gas - Exploration and Production - United States industry. One other stock in the same industry, Ranger Oil , finished the last trading session 2.7% higher at $35.26. ROCC has returned -19.8% over the past month.

For Ranger Oil, the consensus EPS estimate for the upcoming report has changed +1.7% over the past month to $2.56. This represents a change of +143.8% from what the company reported a year ago. Ranger Oil currently has a Zacks Rank of #3 (Hold).

Published in