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Infinera (INFN) Moves 7.7% Higher: Will This Strength Last?

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Infinera (INFN - Free Report) shares ended the last trading session 7.7% higher at $7.38. 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% loss over the past four weeks.

The increase in share price can be attributed to a report from Reuters which stated that Infinera was exploring strategic options including sale of the company citing sources familiar with the matter.

Reuters further added that Infinera in association with Centerview Partners is working on a sale process that will be launched in a few weeks. There was no official comment from either Infinera or Centerview Partners on the matter.

This communications equipment maker is expected to post quarterly loss of $0.01 per share in its upcoming report, which represents a year-over-year change of +85.7%. Revenues are expected to be $381.12 million, up 12.5% 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 Infinera, the consensus EPS estimate for the quarter has been revised 94.4% 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 INFN 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 >>>>

Infinera is part of the Zacks Computer - Networking industry. NetScout Systems (NTCT - Free Report) , another stock in the same industry, closed the last trading session 1.8% higher at $27.63. NTCT has returned -10.6% in the past month.

For NetScout, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.28. This represents a change of -3.5% from what the company reported a year ago. NetScout currently has a Zacks Rank of #3 (Hold).

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