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What makes Argo Blockchain (ARBK) a new buy stock
Argo Blockchain PLC Sponsored ADR (ARBK) seems like an interesting pick, as it was recently upgraded to a Zacks Rank #2 (Buy). An upward trend in earnings estimates – one of the most powerful forces impacting stock prices – triggered this rating change.
The sole determinant of the Zacks rating is the changing earnings picture of a company. The Zacks Consensus Estimate – the consensus of EPS estimates from the sell-side analysts covering the stock – for the current and subsequent years is tracked by the system.
Since changing earnings pictures are a powerful factor influencing near-term stock price movements, the Zacks rating system is very useful for individual investors. They may have difficulty making decisions based on rating improvements by Wall Street analysts, as these are mostly driven by subjective factors that are difficult to see and measure in real time.
Therefore, the Zacks rating upgrade for Argo Blockchain essentially reflects positivity regarding its earnings outlook which could translate into buying pressure and an increase in its stock price.
The most powerful force influencing stock prices
The change in a company’s future earnings potential, as reflected in earnings estimate revisions, and the near-term price movement of its stock are proven to be strongly correlated. The influence of institutional investors has a partial contribution to this relationship, as these large professionals use earnings and earnings estimates to calculate the fair value of a company’s shares. An increase or decrease in earnings estimates in their valuation models simply results in a higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their mass investment action then leads to movement in stock prices.
Fundamentally, the increase in earnings estimates and the subsequent improvement in Argo Blockchain’s rating imply an improvement in the company’s underlying business. Investors should show their appreciation for this improving business trend by pushing the stock higher.
Harness the power of earnings estimate revisions
Since empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, tracking such revisions to make an investment decision could be very rewarding. This is where the proven Zacks Rank stock rating system plays an important role, as it effectively leverages the power of earnings estimate revisions.
The Zacks Rank stock rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive record externally audited path, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here >>> >.
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Earnings Estimate Revisions for Argo Blockchain
For the fiscal year ending December 2024, this company is expected to earn -$0.53 per share, which is a change of 22.1% from the number reported a year ago.
Analysts have consistently increased their estimates for Argo Blockchain. Over the past three months, the Zacks Consensus Estimate for the company has risen 8.6%.
Bottom line
Unlike Wall Street’s overly optimistic analysts, whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of “buy” and “sell” ratings across its entire universe of more than 4,000 titles at any time. Regardless of market conditions, only the top 5% of stocks covered by Zacks earn a “Strong Buy” rating and the next 15% earn a “Buy” rating. Therefore, a stock’s ranking in the top 20% of Zacks covered stocks indicates its superior earnings estimate revision characteristic, making it a solid candidate to produce market-beating returns in the near term.
You can learn more about the Zacks Rank here >>>
Argo Blockchain’s upgrade to Zacks Rank #2 puts it in the top 20% of stocks covered by Zacks in terms of estimate revisions, implying that the stock could move higher in the near term.
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Argo Blockchain PLC Sponsored ADR (ARBK) – Free Stock Analysis Report