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Repay Holdings (RPAY) Soars 5%: Is Further Upside Left in the Stock?

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Repay Holdings (RPAY - Free Report) shares ended the last trading session 5% higher at $7.56. 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 23.5% loss over the past four weeks.

Repay extended its rally for the second straight day, driven by optimism over the improving consumer spending, continued inclination toward digital means and economic recovery. The report issued by the tech giant Mastercard - "Shifting Wallets” on Sep 28 signals of such trends that clearly hint toward a global economic recovery, such as increased flight bookings, better restaurant spending and a surge in online grocery spending. This might have driven optimism of investors regarding financial transaction services stocks like Repay, whose business primarily depends on payment processing fees derived from card transactions and thus, is likely to gain from increased consumer spending.

This company is expected to post quarterly earnings of $0.21 per share in its upcoming report, which represents no change from the year-ago quarter. Revenues are expected to be $69.13 million, up 13.1% 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 Repay Holdings, 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 RPAY 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 >>>>

Repay Holdings is part of the Zacks Financial Transaction Services industry. Envestnet (ENV - Free Report) , another stock in the same industry, closed the last trading session 1% lower at $46.10. ENV has returned -13.5% in the past month.

For Envestnet, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.42. This represents a change of -31.2% from what the company reported a year ago. Envestnet currently has a Zacks Rank of #5 (Strong Sell).


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