Innodata Inc(INOD) shares soared 6.5% in the last trading session to close at $47.65. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 33.2% loss over the past four weeks.
Innodata's stock is expected to have rebounded after plunging 28% in the previous session. The earlier decline followed reports of nearly 550 job cuts in India. The latest recovery may reflect a technical rebound following the sharp sell-off, with investor sentiment potentially supported by strong demand for AI training data and model evaluation services. New program wins with major technology customers, a broader customer base and the company's focus on higher-margin offerings could also support its business prospects.
This company is expected to post quarterly earnings of $0.18 per share in its upcoming report, which represents a year-over-year change of -25%. Revenues are expected to be $84.68 million, up 35.4% 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 Innodata Inc, the consensus EPS estimate for the quarter has been revised 19.6% 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 INOD 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 >>>>
Innodata Inc is a member of the Zacks Engineering - R and D Services industry. One other stock in the same industry, Matrix Service(MTRX), finished the last trading session 2.5% higher at $9.91. MTRX has returned 2.1% over the past month.
Matrix Service's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.18. Compared to the company's year-ago EPS, this represents a change of +1900%. Matrix Service currently boasts a Zacks Rank of #4 (Sell).
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This article originally published on Zacks Investment Research (zacks.com).
