Earnings Estimates Rising for Camtek (CAMT): Will It Gain?

Investors might want to bet on Camtek (CAMT), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

Analysts' growing optimism on the earnings prospects of this maker of automatic optical inspection and process enhancement systems 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.

For Camtek, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The earnings estimate of $0.65 per share for the current quarter represents a change of +44.44% from the number reported a year ago.

The Zacks Consensus Estimate for Camtek has increased 12.98% over the last 30 days, as four estimates have gone higher compared to no negative revisions.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $2.61 per share, representing a year-over-year change of +33.16%.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, five estimates have moved up for Camtek versus no negative revisions. This has pushed the consensus estimate 10.86% higher.

Favorable Zacks Rank

Thanks to promising estimate revisions, Camtek currently carries a Zacks Rank #2 (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

While strong estimate revisions for Camtek have attracted decent investments and pushed the stock 31.5% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.

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