RXO (RXO) Surges 6.3%: Is This an Indication of Further Gains?

RXO (RXO) shares soared 6.3% in the last trading session to close at $16.71. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3.4% gain over the past four weeks.

RXO was recently added to the Russell 2000 Value Index, contributing to the uptick.

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This transportation services provider is expected to post quarterly earnings of $0.02 per share in its upcoming report, which represents a year-over-year change of -33.3%. Revenues are expected to be $1.46 billion, up 57.1% 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 RXO, the consensus EPS estimate for the quarter has been revised 4.8% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on RXO 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 >>>>

RXO belongs to the Zacks Transportation - Services industry. Another stock from the same industry, Hub Group (HUBG), closed the last trading session 4.9% higher at $35.06. Over the past month, HUBG has returned 1%.

Hub Group's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.45. Compared to the company's year-ago EPS, this represents a change of -4.3%. Hub Group currently boasts a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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