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Fabrinet FN shares rallied 4.9% in the last trading session to close at $179.42. 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 11.8% loss over the past four weeks.
The optimism surrounding the stock is largely driven by demand for Fabrinet’s data center interconnect products and coherent ZR modules. Additionally, the company has added 50% more manufacturing space at the Chonburi campus to drive long-term growth.
This company that assembles optical, electro-mechanical and electronic devices for other companies is expected to post quarterly earnings of $2.60 per share in its upcoming report, which represents a year-over-year change of +8.8%. Revenues are expected to be $860.76 million, up 17.7% 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 Fabrinet, 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 FN 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 >>>>
Fabrinet is a member of the Zacks Electronics - Miscellaneous Components industry. One other stock in the same industry, Ballard Power Systems BLDP, finished the last trading session 1.9% higher at $1.10. BLDP has returned -14.3% over the past month.
Ballard's consensus EPS estimate for the upcoming report has changed -10.6% over the past month to -$0.12. Compared to the company's year-ago EPS, this represents a change of +14.3%. Ballard currently boasts a Zacks Rank of #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).