Earnings Estimates Moving Higher for Guardian Pharmacy (GRDN): Time to Buy?

Investors might want to bet on Guardian Pharmacy Services (GRDN), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

Analysts' growing optimism on the earnings prospects of this provider of pharmacy services to long-term care facilities is driving estimates higher, 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 Guardian Pharmacy Services, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates 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

The earnings estimate of $0.24 per share for the current quarter represents a change of +14.3% from the number reported a year ago.

The Zacks Consensus Estimate for Guardian Pharmacy has increased 13.08% over the last 30 days, as one estimate has gone higher while one has gone lower.

Current-Year Estimate Revisions

The company is expected to earn $1.25 per share for the full year, which represents a change of +16.8% from the prior-year number.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, two estimates have moved up for Guardian Pharmacy versus no negative revisions. This has pushed the consensus estimate 19.69% higher.

Favorable Zacks Rank

Thanks to promising estimate revisions, Guardian Pharmacy 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

Investors have been betting on Guardian Pharmacy because of its solid estimate revisions, as evident from the stock's 8.2% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.

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Guardian Pharmacy Services, Inc. (GRDN): Free Stock Analysis Report

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

Zacks Investment Research