Strength Seen in DMC Global (BOOM): Can Its 8.8% Jump Turn into More Strength?
Zacks Investment Research | May 06, 2021 05:45AM ET
DMC Global (NASDAQ:BOOM) shares ended the last trading session 8.8% higher at $54.46. 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 4.5% loss over the past four weeks.
DMC Global’s share prices appreciated after it announced the pricing of its underwritten public offering of 2,500,000 shares of common stock at a discounted price of $45.00 per share. The company has also granted the underwriters a 30-day option to purchase up to 375,000 additional shares of common stock on the same terms.
The gross proceeds to DMC Global from this offering, which is expected to close on or about May 7, 2021, are expected to be around $112.5 million. The company intends to use the net proceeds of the offering for general corporate purposes, which may include acquisitions.
Price and Consensus
This diversified holding company is expected to post quarterly earnings of $0.15 per share in its upcoming report, which represents a year-over-year change of +151.7%. Revenues are expected to be $70.7 million, up 63.7% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For DMC Global, the consensus EPS estimate for the quarter has been revised 37% 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 BOOM 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 Zacks Investment Research
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