Ziff Davis (ZD) Surges 4%: Is This an Indication of Further Gains?

Ziff Davis ZD shares soared 4% in the last trading session to close at $105.06. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.9% loss over the past four weeks.

The upswing in share price can be attributed to the announcement that Everyday Health Group, a division of Ziff Davis, has acquired Buckinghamshire-based Lifecycle Marketing Ltd.

This internet and cloud services company is expected to post quarterly earnings of $2.08 per share in its upcoming report, which represents a year-over-year change of -33.1%. Revenues are expected to be $405.06 million, down 13.7% 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 Ziff Davis, 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 ZD 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 >>>>

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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.