Strength Seen in Silk Road Medical (SILK): Can Its 24.0% Jump Turn into More Strength?

Silk Road Medical SILK shares rallied 24% in the last trading session to close at $26.88. 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 4.7% loss over the past four weeks.

Silk Road Medical scored a strong price increase on investors’ optimism following the company’s latest announcement of its acquisition agreement with Boston Scientific Corporation. The transaction, representing an equity value of approximately $1.26 billion, is likely to close in the second half of 2024, subject to the satisfaction of customary closing conditions, including approval by Silk Road’s stockholders and applicable regulatory approvals.

This medical device maker is expected to post quarterly loss of $0.38 per share in its upcoming report, which represents a year-over-year change of -8.6%. Revenues are expected to be $49.6 million, up 9.5% 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 Silk Road Medical, 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 SILK 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 >>>>

Silk Road Medical is a member of the Zacks Medical - Instruments industry. One other stock in the same industry, CVRx CVRX, finished the last trading session 0.8% higher at $11.05. CVRX has returned 32.4% over the past month.

CVRx's consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.51. Compared to the company's year-ago EPS, this represents a change of +8.9%. CVRx currently boasts a Zacks Rank of #3 (Hold).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Silk Road Medical, Inc. (SILK) : Free Stock Analysis Report

CVRx, Inc. (CVRX) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research