Warner Bros. Discovery (WBD) Surges 10.8%: Is This an Indication of Further Gains?

Warner Bros. Discovery WBD shares soared 10.8% in the last trading session to close at $30.8. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 2.6% loss over the past four weeks.

WBD’s improving streaming momentum, strong content lineup and better subscriber retention provide encouraging signs for sustained growth. Its expanding global reach, resilient sports and news businesses, and promising studio pipeline could support the company’s operating momentum and potentially extend recent gains.

This operator of cable TV channels such as TLC and Animal Planet is expected to post quarterly earnings of $0.02 per share in its upcoming report, which represents a year-over-year change of +133.3%. Revenues are expected to be $8.84 billion, down 2.3% 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 Warner Bros. Discovery, 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 WBD 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 >>>>

Warner Bros. Discovery is a member of the Zacks Broadcast Radio and Television industry. One other stock in the same industry, Roku ROKU, finished the last trading session 0.5% higher at $154.33. ROKU has returned -2.4% over the past month.

Roku's consensus EPS estimate for the upcoming report has changed -0.6% over the past month to $0.55. Compared to the company's year-ago EPS, this represents a change of +243.8%. Roku currently boasts a Zacks Rank of #1 (Strong Buy).

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This article originally published on Zacks Investment Research (zacks.com).

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