Lantronix, Inc. (LTRX) shares soared 8.6% in the last trading session to close at $5.93. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock’s 12.5% gain over the past four weeks.
The increase in share price can be attributed to optimism surrounding growing clout of latest Connectivity Services, which connects Internet of Things (“IoT”) fleets and remote infrastructure.
Strength in Lantronix’s diversified product portfolio that includes modules, gateways and consoles, remains a key catalyst. The acquisitions of Maestro, Intrinsyc and FALCOM also bode well for Lantronix.
Recently, the company announced its third quarter fiscal 2021 results wherein both top and bottom line surpassed Zacks Consensus Estimate by 1.8% and 150% respectively. On a year over year basis, non-GAAP earnings per share and revenues improved 150% and 3.6% , respectively.
Lantronix also announced its intent to buyout Transition Networks and Net2Edge, which constitutes Electronics and Software business division of Communications Systems at a base price of $25 million. The acquistion will add Power over Ethernet (PoE), complementary switching, and media conversion technologies to the company’s IoT connectivity solutions’ suite.
The transaction, subject to regulatory, customary and shareholders’ approvals is expected to close in the months of June or July of 2021.
Price and Consensus
This company is expected to post quarterly earnings of $0.05 per share in its upcoming report, which represents a year-over-year change of +25%. Revenues are expected to be $18.5 million, up 6.3% 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 Lantronix, Inc., 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 LTRX 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
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