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Strength Seen in Signify (SGFY): Can Its 5.8% Jump Turn into More Strength?

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Signify Health shares rallied 5.8% in the last trading session to close at $30.47. 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 0.1% loss over the past four weeks.

Signify recorded a strong price increase following CVS Health’s announcement that it is going to close the $8-billion acquisition of the former on or around Mar 29, 2023. Investors are highly optimistic about the deal as it is expected to enhance the combined company’s connection with consumers in home care and enable providers to address patients better. Upon closing of the deal, Signify Health will continue to operate as a payor-agnostic business as part of CVS Health.

This healthcare platform is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of -145.5%. Revenues are expected to be $246.97 million, up 14.1% 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 Signify, the consensus EPS estimate for the quarter has been revised 325% 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 SGFY 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 >>>>

Signify is a member of the Zacks Medical Info Systems industry. One other stock in the same industry, Privia Health (PRVA - Free Report) , finished the last trading session 1.1% higher at $28.01. PRVA has returned 3.2% over the past month.

Privia Health's consensus EPS estimate for the upcoming report has changed +1185.7% over the past month to $0.03. Compared to the company's year-ago EPS, this represents a change of -75%. Privia Health currently boasts a Zacks Rank of #3 (Hold).

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