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Strength Seen in Establishment Labs Holdings Inc. (ESTA): Can Its 14.3% Jump Turn into More Strength?

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Establishment Labs Holdings Inc. (ESTA - Free Report) shares rallied 14.3% in the last trading session to close at $39.29. 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 33.9% loss over the past four weeks.

Establishment Labs scored a strong price increase, driven by investor’s optimism surrounding the company’s announcement of gaining the 510(k) clearance for the Motiva Flora SmoothSilk Tissue Expander. The approval is being hailed as a milestone, becoming the first of the company’s implantable technologies to be approved by FDA. The product, comprising Establishment Labs’ patented SmoothSilk surface technology, will be now available to women in the United States.

 

This company is expected to post quarterly loss of $0.70 per share in its upcoming report, which represents a year-over-year change of +7.9%. Revenues are expected to be $41.1 million, up 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 Establishment Labs Holdings Inc., the consensus EPS estimate for the quarter has been revised 1.1% 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 ESTA 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 >>>>

Establishment Labs Holdings Inc. belongs to the Zacks Medical Services industry. Another stock from the same industry, Premier, Inc. (PINC - Free Report) , closed the last trading session 0.7% higher at $20.12. Over the past month, PINC has returned -8.9%.

For Premier, Inc., the consensus EPS estimate for the upcoming report has changed -8.3% over the past month to $0.45. This represents a change of -13.5% from what the company reported a year ago. Premier, Inc. currently has a Zacks Rank of #5 (Strong Sell).


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