Energy Recovery, Inc. (ERII) shares ended the last trading session 7% higher at $10.12. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock’s 41.8% loss over the past four weeks.
Energy Recovery’s rally is primarily driven by optimism over the strength in its original equipment manufacturer business, driven by higher shipments of products to the Americas, Asia and Europe markets. ERII’s focus on new product introductions and a strong pipeline of projects bode well.
This maker of energy recovery devices is expected to post quarterly loss of $0.09 per share in its upcoming report, which represents a year-over-year change of +30.8%. Revenues are expected to be $8.75 million, up 8.5% 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 Energy Recovery, the consensus EPS estimate for the quarter has been revised 3.6% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on ERII 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 >>>>
Energy Recovery is a member of the Zacks Pollution Control industry. One other stock in the same industry, CECO Environmental (CECO), finished the last trading session 5.7% higher at $58.41. CECO has returned -29.8% over the past month.
For CECO, the consensus EPS estimate for the upcoming report has changed -22.9% over the past month to $0.12. This represents a change of +20% from what the company reported a year ago. CECO currently has a Zacks Rank of #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).
