Surging Earnings Estimates Signal Upside for Meritage Hospitality Group (MHGU) Stock
Meritage Hospitality Group Inc. (MHGU) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.
Analysts' growing optimism on the earnings prospects of this company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
Consensus earnings estimates for the next quarter and full year have moved considerably higher for Meritage Hospitality Group, as there has been strong agreement among the covering analysts in raising estimates.
Current-Quarter Estimate Revisions
The company is expected to earn $0.37 per share for the current quarter, which represents a year-over-year change of -43.08%.
Over the last 30 days, the Zacks Consensus Estimate for Meritage Hospitality Group has increased 58.06% because one estimate has moved higher compared to no negative revisions.
Current-Year Estimate Revisions
For the full year, the earnings estimate of $1.40 per share represents a change of +150% from the year-ago number.
In terms of estimate revisions, the trend for the current year also appears quite encouraging for Meritage Hospitality Group. Over the past month, one estimate has moved higher compared to no negative revisions, helping the consensus estimate increase 44.33%.
Favorable Zacks Rank
The promising estimate revisions have helped Meritage Hospitality Group earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Bottom Line
Meritage Hospitality Group shares have added 5.3% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.
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Meritage Hospitality Group Inc. (MHGU) : Free Stock Analysis Report