Core Molding Technologies (CMT) Soars 7.5%: Is Further Upside Left in the Stock?

Core Molding Technologies (CMT) shares rallied 7.5% in the last trading session to close at $19.76. 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 no gain, no loss over the past four weeks.

Optimism over a normalizing consumer demand environment and stabilizing customer inventories is driving the stock higher. The company is also benefiting from new program launches and its profitability initiatives across its product lines.

This maker of fiber reinforced plastics is expected to post quarterly earnings of $0.26 per share in its upcoming report, which represents a year-over-year change of -60.6%. Revenues are expected to be $78.69 million, down 20.9% 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 Core Molding Technologies, 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 CMT 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 >>>>

Core Molding Technologies is a member of the Zacks Rubber - Plastics industry. One other stock in the same industry, Proto Labs (PRLB), finished the last trading session 1.4% lower at $31.81. PRLB has returned -5.4% over the past month.

Proto Labs' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.30. Compared to the company's year-ago EPS, this represents no change. Proto Labs currently boasts a Zacks Rank of #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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