AMC Networks (AMCX) shares soared 17.7% in the last trading session to close at $66.80. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 24.6% gain over the past four weeks.
Increased optimism over rising viewer engagement, efficient economic model, and pricing power of the company's streaming offerings primarily drove the stock higher.
This owner of cable channels including AMC and IFC is expected to post quarterly earnings of $2.21 per share in its upcoming report, which represents a year-over-year change of -7.5%. Revenues are expected to be $705.14 million, up 9.1% 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 AMC Networks, the consensus EPS estimate for the quarter has been revised 11.5% 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 AMCX 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).