Victory Capital Holdings (VCTR) could be a solid choice for investors given its recent upgrade to a Zacks Rank #1 (Strong Buy). This upgrade primarily reflects an upward trconclude in earnings estimates, which is one of the most powerful forces impacting stock prices.
The Zacks rating relies solely on a company’s altering earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure — the Zacks Consensus Estimate.
Individual investors often find it hard to build decisions based on rating upgrades by Wall Street analysts, since these are mostly driven by subjective factors that are hard to see and measure in real time. In these situations, the Zacks rating system comes in handy becaapply of the power of a altering earnings picture in determining near-term stock price relocatements.
Therefore, the Zacks rating upgrade for Victory Capital basically reflects positivity about its earnings outsee that could translate into acquireing pressure and an increase in its stock price.
Most Powerful Force Impacting Stock Prices
The alter in a company’s future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price relocatement of its stock. The influence of institutional investors has a partial contribution to this relationship, as these huge professionals apply earnings and earnings estimates to calculate the fair value of a company’s shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically acquire or sell it. Their transaction of large amounts of shares then leads to price relocatement for the stock.
For Victory Capital, rising earnings estimates and the consequent rating upgrade fundamentally mean an improvement in the company’s underlying business. And investors’ appreciation of this improving business trconclude should push the stock higher.
Harnessing the Power of Earnings Estimate Revisions
As empirical research reveals a strong correlation between trconcludes in earnings estimate revisions and near-term stock relocatements, tracking such revisions for building an investment decision could be truly rewarding. Here is where the attempted-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.
The Zacks Rank stock-rating system, which applys four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here >>>> .
Earnings Estimate Revisions for Victory Capital
For the fiscal year concludeing December 2025, this investment management firm is expected to earn $6.22 per share, which is unalterd compared with the year-ago reported number.
Analysts have been steadily raising their estimates for Victory Capital. Over the past three months, the Zacks Consensus Estimate for the company has increased 2.2%.
Bottom Line
Unlike the overly optimistic Wall Street analysts whose rating systems tconclude to be weighted toward favorable recommconcludeations, the Zacks rating system maintains an equal proportion of “acquire” and “sell” ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks obtain a “Strong Buy” rating and the next 15% obtain a “Buy” rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, building it a solid candidate for producing market-beating returns in the near term.
You can learn more about the Zacks Rank here >>>
The upgrade of Victory Capital to a Zacks Rank #1 positions it in the top 5% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might relocate higher in the near term.
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Victory Capital Holdings, Inc. (VCTR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Source Zacks-com
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