Angel Oak (AOMR) Surges 6.7%: Is This an Indication of Further Gains?

Angel Oak Mortgage (AOMR) shares ended the last trading session 6.7% higher at $13.72. 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 14.6% loss over the past four weeks.

Investors are likely bullish about Angel Oak Mortgage, Inc. on expectations of the interest rate hikes and improvement in economic conditions this year. Also, reduced volatility in the interest rates and spreads will likely reduce mark-to-market valuations. These possibly led to the optimistic stance of the investors, which drove the AOMR stock.

This real estate finance company is expected to post quarterly earnings of $0.47 per share in its upcoming report, which represents a year-over-year change of +4.4%. Revenues are expected to be $34.2 million, up 181.7% 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 Angel Oak, 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 AOMR 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 >>>>

Angel Oak belongs to the Zacks Financial - Mortgage & Related Services industry. Another stock from the same industry, Walker & Dunlop (WD), closed the last trading session 3.8% higher at $99.15. Over the past month, WD has returned -10.3%.

Walker & Dunlop's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.75. Compared to the company's year-ago EPS, this represents a change of +1.2%. Walker & Dunlop currently boasts a Zacks Rank of #5 (Strong Sell).

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