Carvana (CVNA) shares rallied 5% in the last trading session to close at $176.32. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 2.2% loss over the past four weeks.

Carvana shares surged yesterday after the company announced its plan to develop a large-scale auction and reconditioning “Megasite” in Phoenix, AZ. This facility will enhance the dealership’s ability to process more vehicles and increase inventory, making it possible for local customers to receive their purchases within one day. The transformation of the Phoenix ADESA location into an auction and Inspection and Reconditioning Center Megasite will leverage the site’s already substantial infrastructure and space.

This company is expected to post quarterly earnings of $0.69 per share in its upcoming report, which represents a year-over-year change of +268.3%. Revenues are expected to be $3.96 billion, up 29.5% 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 Carvana, the consensus EPS estimate for the quarter has been revised 1.3% 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 CVNA 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 >>>>

Carvana belongs to the Zacks Internet - Commerce industry. Another stock from the same industry, 1stdibs.com (DIBS), closed the last trading session 6.2% lower at $2.42. Over the past month, DIBS has returned -23.2%.

1stdibs' consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.13. Compared to the company's year-ago EPS, this represents a change of -62.5%. 1stdibs 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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