Strength Seen in ChampionX (CHX): Can Its 10.4% Jump Turn into More Strength?

ChampionX (CHX) shares soared 10.4% in the last trading session to close at $39.08. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 12.4% gain over the past four weeks.

Shares of CHX are quite likely to have appreciated after the announcement of its acquisition by SLB was released. Per the definitive agreement, ChampionX shareholders will receive 0.735 shares of SLB common stock for every ChampionX share. Furthermore, at the closing of this buyout, the company’s shareholders will own approximately 9% of SLB’s outstanding shares of common stock. The takeaways from this strategic transaction have most likely induced bullish sentiments among investors.

This oil and gas drilling technology company is expected to post quarterly earnings of $0.40 per share in its upcoming report, which represents a year-over-year change of +11.1%. Revenues are expected to be $922.13 million, down 2.8% 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 ChampionX, 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 CHX 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 >>>>

ChampionX belongs to the Zacks Engineering - R and D Services industry. Another stock from the same industry, Altair Engineering (ALTR), closed the last trading session 2% lower at $83.76. Over the past month, ALTR has returned -0.4%.

Altair Engineering's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.35. Compared to the company's year-ago EPS, this represents a change of -2.8%. Altair Engineering currently boasts a Zacks Rank of #2 (Buy).

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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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