Strength Seen in Nevro (NVRO): Can Its 5.1% Jump Turn into More Strength?

Nevro NVRO shares ended the last trading session 5.1% higher at $39.04. 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 9.6% loss over the past four weeks.

Nevro recorded a strong price increase before its fourth-quarter 2022 earnings release with the latest Zacks Consensus Estimate showing significant upward revision for its quarterly revenues and earnings compared to the year-ago reported number. The company is scheduled to release its fourth-quarter earnings on Feb 16. Also, Nevro’s announcement of its management’s participation in a fireside chat at Citi's 2023 Healthcare Services, Medtech, Tools & HCIT Conference on Mar 1 raises optimism.

This maker of an electrical implant that treats leg and back pain is expected to post quarterly loss of $0.49 per share in its upcoming report, which represents a year-over-year change of +43%. Revenues are expected to be $113.21 million, up 10.2% 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 Nevro, the consensus EPS estimate for the quarter has been revised 7.4% 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 NVRO 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 >>>>

Nevro is a member of the Zacks Medical - Instruments industry. One other stock in the same industry, Globus Medical GMED, finished the last trading session 2% higher at $78.59. GMED has returned 4.3% over the past month.

Globus Medical's consensus EPS estimate for the upcoming report has changed -9.6% over the past month to $0.56. Compared to the company's year-ago EPS, this represents a change of +14.3%. Globus Medical currently boasts a Zacks Rank of #4 (Sell).

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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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