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Strength Seen in Wayfair (W): Can Its 20.3% Jump Turn into More Strength?

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Wayfair (W - Free Report) shares soared 20.3% in the last trading session to close at $46.79. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 13.7% gain over the past four weeks.

Wayfair extended its rally, driven by its latest decision regarding job cuts. Notably, the company is set to lay off 1,000 workers or 10% of its workforce.

This online home goods retailer is expected to post quarterly loss of $1.64 per share in its upcoming report, which represents a year-over-year change of -78.3%. Revenues are expected to be $3.01 billion, down 7.5% 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 Wayfair, the consensus EPS estimate for the quarter has been revised 0.6% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on W 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 >>>>

Wayfair is a member of the Zacks Internet - Commerce industry. One other stock in the same industry, Fiverr International (FVRR - Free Report) , finished the last trading session 3.1% higher at $33.93. FVRR has returned 10% over the past month.

Fiverr's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.22. Compared to the company's year-ago EPS, this represents no change. Fiverr currently boasts a Zacks Rank of #3 (Hold).


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