Global Water Resources (GWRS) Soars 5.2%: Is Further Upside Left in the Stock?

Global Water Resources, Inc. (GWRS) shares soared 5.2% in the last trading session to close at $10.75. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 5.3% gain over the past four weeks.

Global Water Resources leverages its Total Water Management approach to enhance water sustainability and resource efficiency. By integrating the treatment, recycling, and reuse of water within its service areas, the company maximizes the use of recycled water—an increasingly valuable strategy in water-scarce and rapidly growing regions. 

In addition, GWRS continues to expand its footprint through strategic acquisitions of smaller water and wastewater utilities located in high-growth corridors. Favorable rate case approvals also help the company since they enable it to recoup infrastructure investments and generate a reasonable return. Such approvals are expected to drive revenue growth and enhance cash flows in the coming years. 

This company is expected to post quarterly earnings of $0.09 per share in its upcoming report, which represents a year-over-year change of -25%. Revenues are expected to be $15.2 million, up 6.2% 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 Global Water Resources, 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 GWRS 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). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Global Water Resources is part of the Zacks Utility - Water Supply industry. Middlesex Water (MSEX), another stock in the same industry, closed the last trading session 1.3% higher at $54.85. MSEX has returned 2% in the past month.

Middlesex Water's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.86. Compared to the company's year-ago EPS, this represents a change of +7.5%. Middlesex Water currently boasts a Zacks Rank of #3 (Hold).

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

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