ADTRAN Holdings (ADTN) Moves 8.5% Higher: Will This Strength Last?

ADTRAN Holdings (ADTN) shares ended the last trading session 8.5% higher at $11.71. 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 6.3% gain over the past four weeks.

The uptrend was largely buoyed by the upcoming launch of a broad portfolio of optical networking technologies designed to support scalable, energy-efficient AI infrastructure across data center, transport and access networks. These include LiteWave800 – an 800Gbit/s pluggable optics for intra-data center links that can significantly reduce power consumption and thermal constraints in dense AI data center fabrics, and the ADTRAN FSP 3000 S-Flex, which will highlight quantum-safe optical transport for mission-critical networks.

This networking equipment maker is expected to post quarterly earnings of $0.09 per share in its upcoming report, which represents a year-over-year change of +200%. Revenues are expected to be $285.48 million, up 15.2% 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 ADTRAN Holdings, the consensus EPS estimate for the quarter has been revised 153.3% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on ADTN 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 >>>>

ADTRAN Holdings belongs to the Zacks Communication - Components industry. Another stock from the same industry, Harmonic (HLIT), closed the last trading session 2.1% lower at $9.34. Over the past month, HLIT has returned -11.3%.

For Harmonic, the consensus EPS estimate for the upcoming report has changed +11.1% over the past month to $0.12. This represents a change of +9.1% from what the company reported a year ago. Harmonic currently has a Zacks Rank of #4 (Sell).

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

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