Patrick Industries (PATK) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.
The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this building products manufacturer, 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. This insight is at the core of our stock rating tool -- the Zacks Rank.
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.
Consensus earnings estimates for the next quarter and full year have moved considerably higher for Patrick Industries, as there has been strong agreement among the covering analysts in raising estimates.
The company is expected to earn $0.61 per share for the current quarter, which represents a year-over-year change of +22%.
The Zacks Consensus Estimate for Patrick Industries has increased 146.8% over the last 30 days, as three estimates have gone higher compared to no negative revisions.
For the full year, the earnings estimate of $5.34 per share represents a change of +138.39% from the year-ago number.
In terms of estimate revisions, the trend for the current year also appears quite encouraging for Patrick Industries. Over the past month, four estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 149.46%.
The promising estimate revisions have helped Patrick Industries earn 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.
While strong estimate revisions for Patrick Industries have attracted decent investments and pushed the stock 222.5% 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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