Ontrak, Inc. (OTRK) Surges 6.7%: Is This an Indication of Further Gains?

Ontrak, Inc. (OTRK) shares ended the last trading session 6.7% higher at $26.02. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 69.1% loss over the past four weeks.

Ontrak’s preliminary fourth-quarter and full-year 2020 financial results are primarily responsible for its solid price appreciation. Per the pre-announcement, the company reported a record fourth-quarter and full-year 2020 revenue performance, with the fourth-quarter sales registering year-over-year growth of 149% and full-year sales delivering an increase of 136% from the year-ago period. Market is also upbeat about the company’s projection of returning to revenue growth rate of 100% in 2022 riding on the strength of its pipeline. The company is scheduled to release its fourth-quarter and full-year 2020 results on Mar 9.

Price and Consensus

Price Consensus Chart for Ontrak, Inc.

This company is expected to post quarterly loss of $0.33 per share in its upcoming report, which represents a year-over-year change of -3.1%. Revenues are expected to be $27.01 million, up 118.9% 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 Ontrak, Inc., the consensus EPS estimate for the quarter has been revised 2.1% 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 OTRK 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 >>>>

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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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