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Meritage Hospitality Group (MHGU) Surges 5.8%: Is This an Indication of Further Gains?

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Meritage Hospitality Group Inc. (MHGU - Free Report) shares soared 5.8% in the last trading session to close at $18.43. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 2% loss over the past four weeks.

Investor confidence has been bolstered by the company's emphasis on renovations, new restaurant development, and strategic acquisitions. Leveraging its strong operational platform and internal expertise in restaurant development, the company is poised for success.

This company is expected to post quarterly earnings of $0.17 per share in its upcoming report, which represents a year-over-year change of +156.7%. Revenues are expected to be $162.8 million, up 3.2% 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 Meritage Hospitality Group, the consensus EPS estimate for the quarter has been revised 28% 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 MHGU going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Meritage Hospitality Group is part of the Zacks Retail - Restaurants industry. Portillo's Inc. (PTLO - Free Report) , another stock in the same industry, closed the last trading session 0.2% lower at $11.92. PTLO has returned -8% in the past month.

Portillo's Inc.'s consensus EPS estimate for the upcoming report has changed -8.5% over the past month to $0.05. Compared to the company's year-ago EPS, this represents no change. Portillo's Inc. currently boasts a Zacks Rank of #3 (Hold).


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