Dj Dir Washington Sells 10353 Of Olo Inc >Olo

As of Nov. 13, 2024, four stocks in the information technology sector could be flashing a real warning to investors who value momentum as a key criteria in their trading decisions.

The RSI is a momentum indicator, which compares a stock’s strength on days when prices go up to its strength on days when prices go down. When compared to a stock’s price action, it can give traders a better sense of how a stock may perform in the short term. An asset is typically considered overbought when the RSI is above 70, according to Benzinga Pro.

Here's the latest list of major overbought players in this sector.

Olo Inc

• On Nov. 7, Olo posted better-than-expected quarterly earnings. “Team Olo executed well on our top priorities in the third quarter and positioned us to complete a successful 2024. We continued to win, retain, and expand with brands, we drove further innovation across our Order, Pay, and Engage product suites — including the general availability of Olo Pay’s card-present functionality on Qu point-of-sale systems — and we delivered revenue and bottom line performance that exceeded the high-end of our guidance ranges,” said Noah Glass, Olo’s Founder and CEO. The company's stock gained around 44% over the past month and has a 52-week high of $7.04.
• RSI Value: 90.08
• OLO Price Action: Shares of Olo gained 10.6% to close at $6.90 on Tuesday.

Couchbase Inc

• Couchbase will report financial results for its third quarter ended Oct. 31, on Tuesday, Dec. 3 after market close. The company's stock gained around 18% over the past month and has a 52-week high of $32.00.
• RSI Value: 78.49
• BASE Price Action: Shares of Couchbase gained 5.5% to close at $19.57 on Tuesday.

BILL Holdings Inc

• On Nov. 7, BILL Holdings reported better-than-expected first-quarter financial results and issued FY25 guidance above estimates. The company's stock jumped around 45% over the past five days and has a 52-week high is $275.52.
• RSI Value: 90.16
• BILL Price Action: Shares of BILL gained 3.6% to close at $89.01 on Tuesday.

Zscaler Inc

• Zscaler will release first quarter fiscal year 2025 earnings after the closing bell on Monday, Dec. 2. The company's stock jumped around 9% over the past five days and has a 52-week high of $259.58.
• RSI Value: 76.64
• ZS Price Action: Shares of Zscaler climbed 4.8% to close at $209.04 on Tuesday.

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For the quarter ended September 2024, Olo Inc. (OLO) reported revenue of $71.85 million, up 24.3% over the same period last year. EPS came in at $0.06, compared to $0.04 in the year-ago quarter.

The reported revenue compares to the Zacks Consensus Estimate of $71.07 million, representing a surprise of +1.11%. The company delivered an EPS surprise of +20.00%, with the consensus EPS estimate being $0.05.

While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.

Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.

Here is how Olo performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

• ARPU: $850 versus the two-analyst average estimate of $849.11.
• Ending Active Locations: 85,000 compared to the 83,325 average estimate based on two analysts.
• Revenue- Platform: $71 million compared to the $70.23 million average estimate based on three analysts. The reported number represents a change of +24% year over year.
• Revenue- Professional services and other: $0.85 million compared to the $0.84 million average estimate based on three analysts. The reported number represents a change of +60.2% year over year.
• Gross profit- Services- Non-GAAP: $0.18 million versus $0.03 million estimated by three analysts on average.
• Gross profit- Platform- Non-GAAP: $43.44 million versus the three-analyst average estimate of $43.15 million.

View all Key Company Metrics for Olo here>>>

Shares of Olo have returned +19.3% over the past month versus the Zacks S&P 500 composite's +3.2% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term.

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Olo Inc. (OLO) came out with quarterly earnings of $0.06 per share, beating the Zacks Consensus Estimate of $0.05 per share. This compares to earnings of $0.04 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 20%. A quarter ago, it was expected that this company would post earnings of $0.05 per share when it actually produced earnings of $0.05, delivering no surprise.

Over the last four quarters, the company has surpassed consensus EPS estimates just once.

Olo, which belongs to the Zacks Internet - Software industry, posted revenues of $71.85 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.11%. This compares to year-ago revenues of $57.79 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Olo shares have lost about 2.8% since the beginning of the year versus the S&P 500's gain of 24.3%.

What's Next for Olo?

While Olo has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Olo: favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.06 on $72.03 million in revenues for the coming quarter and $0.21 on $280.11 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 25% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the same industry, Snowflake Inc. (SNOW), is yet to report results for the quarter ended October 2024. The results are expected to be released on November 20.

This company is expected to post quarterly earnings of $0.15 per share in its upcoming report, which represents a year-over-year change of -40%. The consensus EPS estimate for the quarter has been revised 0.1% lower over the last 30 days to the current level.

Snowflake Inc.'s revenues are expected to be $898.77 million, up 22.4% from the year-ago quarter.

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