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Arco Platform Limited (ARCE) Surges 14.5%: Is This an Indication of Further Gains?

Arco Platform Limited ARCE shares ended the last trading session 14.5% higher at $12.48. 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 0.6% loss over the past four weeks.

The upswing can be attributed to the revised acquisition proposal from General Atlantic L.P. and Dragoneer Investment Group to acquire all of the outstanding Class A common shares of Arco that are not held by such parties or Oto Brasil de Sá Cavalcante and Ari de Sá Cavalcante Neto or their respective affiliates at a price of $13 per share in cash.

This company is expected to post quarterly loss of $0.10 per share in its upcoming report, which represents a year-over-year change of -200%. Revenues are expected to be $111.47 million, up 35.5% 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 Arco Platform Limited, the consensus EPS estimate for the quarter has been revised 183.3% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on ARCE 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 the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Arco Platform Limited is part of the Zacks Internet - Software industry. PagerDuty (PD), another stock in the same industry, closed the last trading session 0.4% lower at $29.94. PD has returned -14.1% in the past month.

For PagerDuty , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.09. This represents a change of +325% from what the company reported a year ago. PagerDuty currently has a Zacks Rank of #2 (Buy).

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