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Vista Outdoor (VSTO) Surges 10.5%: Is This an Indication of Further Gains?

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Vista Outdoor (VSTO - Free Report) shares soared 10.5% in the last trading session to close at $44.01. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 4.1% gain over the past four weeks.

Vista Outdoor shares appreciated after the news that its operating segment, Revelyst, entered an agreement with Strategic Value Partners, LLC ("SVP") under which SVP-managed funds will acquire Revelyst in an all-cash transaction valued at $1.125 billion.

 

This maker of firearms, ammunition and accessories is expected to post quarterly earnings of $0.92 per share in its upcoming report, which represents a year-over-year change of -4.2%. Revenues are expected to be $658.15 million, down 2.8% 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 Vista Outdoor, 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 VSTO 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 >>>>

Vista Outdoor is a member of the Zacks Leisure and Recreation Products industry. One other stock in the same industry, Clarus Corporation (CLAR - Free Report) , finished the last trading session 0.2% higher at $4.39. CLAR has returned 7.6% over the past month.

For Clarus, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.06. This represents a change of -62.5% from what the company reported a year ago. Clarus currently has a Zacks Rank of #3 (Hold).


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