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Arlo Technologies (ARLO) Surges 19.7%: Is This an Indication of Further Gains?

Zacks Equity Research
·2 min read

Arlo Technologies ARLO shares rallied 19.7% in the last trading session to close at $16.52. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 4.7% gain over the past four weeks.

Arlo is benefiting from its AI-powered subscription service surpassing 4 million paid accounts, reflecting the value consumers place on its subscription plans and service business.

This maker of smart connected devices is expected to post quarterly earnings of $0.09 per share in its upcoming report, which represents a year-over-year change of +50%. Revenues are expected to be $124.75 million, up 8.4% 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.

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For Arlo Technologies, 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 ARLO going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Arlo Technologies is a member of the Zacks Internet - Software industry. One other stock in the same industry, Hello Group Inc. Sponsored ADR MOMO, finished the last trading session 7.9% higher at $6.61. MOMO has returned 8.5% over the past month.

Momo's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.40. Compared to the company's year-ago EPS, this represents a change of -7%. Momo currently boasts a Zacks Rank of #5 (Strong Sell).

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Arlo Technologies, Inc. (ARLO) : Free Stock Analysis Report

Hello Group Inc. Sponsored ADR (MOMO) : Free Stock Analysis Report

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Zacks Investment Research