Victory Capital(VCTR) ZACKS·2024-11-19 18:01Core Viewpoint - Victory Capital Holdings (VCTR) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Ratings - The Zacks rating system is primarily based on a company's changing earnings picture, tracking the Zacks Consensus Estimate for EPS from sell-side analysts [2]. - The Zacks rating upgrade for Victory Capital reflects a positive outlook on its earnings, likely leading to favorable stock price movements [4][6]. Impact of Earnings Estimates on Stock Prices - Changes in future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements, influenced by institutional investors [5]. - Rising earnings estimates for Victory Capital indicate an improvement in the company's underlying business, which is expected to drive the stock price higher [6]. Importance of Earnings Estimate Revisions - Empirical research shows a strong correlation between earnings estimate revisions and stock movements, making tracking these revisions beneficial for investment decisions [7]. - The Zacks Rank system effectively utilizes earnings estimate revisions to classify stocks into five groups, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. Specific Earnings Estimates for Victory Capital - Victory Capital is projected to earn $5.32 per share for the fiscal year ending December 2024, representing an 18% year-over-year increase [9]. - Over the past three months, the Zacks Consensus Estimate for Victory Capital has increased by 1.1% [9]. Zacks Rating System Overview - The Zacks rating system maintains a balanced distribution of 'buy' and 'sell' ratings across its universe of over 4000 stocks, with only the top 5% receiving a 'Strong Buy' rating [10]. - Being in the top 20% of Zacks-covered stocks indicates superior earnings estimate revision characteristics, positioning Victory Capital for potential market-beating returns [11][12].