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NewtekOne (NEWT) Soars 5.9%: Is Further Upside Left in the Stock?

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NewtekOne (NEWT - Free Report) shares soared 5.9% in the last trading session to close at $12.13. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 1.6% loss over the past four weeks.

NewtekOne extended its rally for the second straight day, buoyed by optimism surrounding its expanding business and financial offerings. Also, its subsidiary, Newtek Bank, witnessed significant growth in small business administration loans in the first quarter of 2024.

NEWT's loan approval pipeline across all lending products is experiencing solid growth. Remarkably, the company views its full-year 2024 earnings per share guidance in the range of $1.80-$2 as conservative, given its strong lending performance.

This provider of financial and business services to small-and medium-sized business is expected to post quarterly earnings of $0.21 per share in its upcoming report, which represents a year-over-year change of -53.3%. Revenues are expected to be $49.06 million, up 3.6% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For NewtekOne, the consensus EPS estimate for the quarter has been revised 4.8% 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 NEWT 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 >>>>

NewtekOne is a member of the Zacks Financial - Miscellaneous Services industry. One other stock in the same industry, American Express (AXP - Free Report) , finished the last trading session 3.1% lower at $219.59. AXP has returned 3.7% over the past month.

For American Express, the consensus EPS estimate for the upcoming report has changed +0.1% over the past month to $3.01. This represents a change of +25.4% from what the company reported a year ago. American Express currently has a Zacks Rank of #2 (Buy).


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