Envela Corporation (ELA) Soars 7.5%: Is Further Upside Left in the Stock?

Envela Corporation (ELA) shares rallied 7.5% in the last trading session to close at $5.29. 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 12.3% gain over the past four weeks.

Shares of Envela Corporation have been getting a boost from the company’s strategic initiatives. Focus on strategic growth efforts and investing in its capabilities aided the company in fiscal 2021, per management’s last earnings call. The company closed the fiscal year on a robust note, including a significant improvement in bottom line. This in turn was backed by solid top-line growth in all major business functions. We note that earlier this week, Envela’s subsidiary, DGSE, LLC unveiled the appointment of Thomas Mathias (an executive with solid retail real estate experience) in its leadership team.

This company is expected to post quarterly earnings of $0.05 per share in its upcoming report, which represents a year-over-year change of -28.6%. Revenues are expected to be $31.54 million, up 23.7% 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 Envela Corporation, 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 ELA 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 >>>>

Envela Corporation is a member of the Zacks Retail - Jewelry industry. One other stock in the same industry, Signet (SIG), finished the last trading session 0.4% lower at $81.23. SIG has returned -1.4% over the past month.

Signet's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $2.27. Compared to the company's year-ago EPS, this represents a change of +1.8%. Signet currently boasts a Zacks Rank of #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.