Can NerdWallet, Inc. (NRDS) Run Higher on Rising Earnings Estimates?

NerdWallet, Inc. (NRDS) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.

The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For NerdWallet, Inc., there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

For the current quarter, the company is expected to earn $0.17 per share, which is a change of +1,600.0% from the year-ago reported number.

Over the last 30 days, four estimates have moved higher for NerdWallet, Inc. compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 11.48%.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $0.58 per share, representing a year-over-year change of +680.0%.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for NerdWallet, Inc.. Over the past month, three estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 24.6%.

Favorable Zacks Rank

Thanks to promising estimate revisions, NerdWallet, Inc. currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

While strong estimate revisions for NerdWallet, Inc. have attracted decent investments and pushed the stock 36.2% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.

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

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