Surging Earnings Estimates Signal Upside for Revolve Group (RVLV) Stock

Revolve Group (RVLV) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.The upward trend in estimate revisions for this online women's fashion retailer reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.For Revolve Group, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:12 Month EPSCurrent-Quarter Estimate RevisionsThe earnings estimate of $0.11 per share for the current quarter represents a change of -26.7% from the number reported a year ago.The Zacks Consensus Estimate for Revolve Group has increased 62.81% over the last 30 days, as six estimates have gone higher compared to no negative revisions.Current-Year Estimate RevisionsFor the full year, the company is expected to earn $0.51 per share, representing a year-over-year change of -26.1%.In terms of estimate revisions, the trend for the current year also appears quite encouraging for Revolve Group. Over the past month, eight estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 24.59%.Favorable Zacks RankThanks to promising estimate revisions, Revolve Group currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.Bottom LineInvestors have been betting on Revolve Group because of its solid estimate revisions, as evident from the stock's 6.2% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.See "2nd Wave" AI stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Revolve Group, Inc. (RVLV): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks