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U.S. Cellular (USM) Moves 5.3% Higher: Will This Strength Last?

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United States Cellular (USM - Free Report) shares soared 5.3% in the last trading session to close at $65.94. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3% loss over the past four weeks.

U.S. Cellular has taken concrete steps to accelerate subscriber additions and improve churn management. The company aims to offer the best wireless experience to customers by providing superior quality network and national coverage. Management's efforts to enhance operational efficiency and drive cost optimization across its operations have significantly boosted profitability despite a very challenging competitive environment. The company’s improvised strategy to launch flat rate plans is enabling it to successfully navigate through the fierce competition in the U.S. wireless industry. These pricing plans are gaining considerable popularity among postpaid customers. These factors have instilled investor optimism, which probably propelled the share price appreciation.

This wireless telecommunications service provider is expected to post quarterly earnings of $0.37 per share in its upcoming report, which represents a year-over-year change of +85%. Revenues are expected to be $925.42 million, down 2.6% 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 U.S. Cellular, 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 USM going forward to see if this recent jump can turn into more strength down the road.

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

U.S. Cellular belongs to the Zacks Wireless National industry. Another stock from the same industry, ATN International (ATNI - Free Report) , closed the last trading session 1.5% higher at $17.83. Over the past month, ATNI has returned -17.2%.

For ATN International, the consensus EPS estimate for the upcoming report has changed -64.5% over the past month to -$0.16. This represents a change of +61.9% from what the company reported a year ago. ATN International currently has a Zacks Rank of #1 (Strong Buy).


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