Strength Seen in PROG Holdings: Can Its 5.5% Jump Turn into More Strength?

PROG Holdings PRG shares ended the last trading session 5.5% higher at $37.79. 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 7% gain over the past four weeks.

Shares of PROG Holdings rallied for the second consecutive day. Rise in consumer confidence in May after three straight months of decline seems have cheered the investors of this consumer loan provider stock. Though inflation and interest rates worry persisted, the strong labor market continued to bolster the U.S. consumer sentiments. This favorable development perhaps drove the PRG stock higher.

This rent-to-own company is expected to post quarterly earnings of $0.71 per share in its upcoming report, which represents a year-over-year change of -22.8%. Revenues are expected to be $571.55 million, down 3.6% 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.

For PROG Holdings, 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 PRG 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).

PROG Holdings belongs to the Zacks Financial - Consumer Loans industry. Another stock from the same industry, Enova International ENVA, closed the last trading session 1.2% higher at $61.65. Over the past month, ENVA has returned -1.2%.

For Enova International, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $2.08. This represents a change of +20.9% from what the company reported a year ago. Enova International currently has a Zacks Rank of #3 (Hold).

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