Olo (OLO) Upgraded to Buy: Here's Why

Core Viewpoint - Olo Inc. (OLO) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive outlook driven by rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Recent Performance and Projections - For the fiscal year ending December 2024, Olo is projected to earn $0.23 per share, reflecting a 53.3% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Olo has risen by 88.2%, indicating a significant upward revision in earnings expectations [8]. Zacks Rating System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - Olo's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].