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Noodles & Co. (NDLS) Moves 5.6% Higher: Will This Strength Last?

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Noodles & Co. (NDLS - Free Report) shares ended the last trading session 5.6% higher at $5.09. 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 18.9% loss over the past four weeks.

Improvement in the company’s staffing operations, a normalized cost of goods sold environment and a strong unit pipeline have been boosting investors’ confidence.

This restaurant chain is expected to post quarterly loss of $0.08 per share in its upcoming report, which represents a year-over-year change of +38.5%. Revenues are expected to be $126.78 million, up 12.6% 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 Noodles & Co., the consensus EPS estimate for the quarter has been revised 366.7% 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 NDLS 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 >>>>

Noodles & Co. belongs to the Zacks Retail - Restaurants industry. Another stock from the same industry, Starbucks (SBUX - Free Report) , closed the last trading session 0.4% higher at $99.46. Over the past month, SBUX has returned -8.7%.

For Starbucks, the consensus EPS estimate for the upcoming report has changed -0.5% over the past month to $0.64. This represents a change of +8.5% from what the company reported a year ago. Starbucks currently has a Zacks Rank of #3 (Hold).

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