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Model N (MODN) Moves 10.1% Higher: Will This Strength Last?

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Model N (MODN - Free Report) shares rallied 10.1% in the last trading session to close at $29.82. 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 8.1% gain over the past four weeks.

Model N and Vista Equity Partners have inked a definitive buyout agreement. Per the deal, Vista will acquire MODN for approximately $1.25 billion. The merger signals a strategic move in the enterprise software domain.

Vista, a prominent global investment firm, will procure all the outstanding shares of Model N common stock at $30.00 per share in an all-cash transaction. This offer, constituting a premium of around 23% over the 30-day volume weighted average share price prior to the announcement, underscores Vista's commitment to recognizing Model N's value.

The transaction delivers immediate cash value to stockholders and aligns with the company's long-term objectives. For Model N, the acquisition by Vista opens doors to enhanced resources, positioning it for sustained growth and market leadership in the years to come. Vista's recognition of Model N's expertise in revenue management solutions for Life Sciences and advanced technology industries further solidifies the strategic fit.

This provider of revenue management services to the life science and technology industries is expected to post quarterly earnings of $0.26 per share in its upcoming report, which represents a year-over-year change of +18.2%. Revenues are expected to be $64.01 million, up 2.3% 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 Model N, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on MODN 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 >>>>

Model N is part of the Zacks Internet - Software industry. WalkMe (WKME - Free Report) , another stock in the same industry, closed the last trading session 0.4% higher at $8.24. WKME has returned -6.6% in the past month.

For WalkMe, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.02. This represents a change of +125% from what the company reported a year ago. WalkMe currently has a Zacks Rank of #3 (Hold).

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