Ecommerce stock RB Global is Monday's IBD 50 Growth Stocks To Watch pick as the stock has jumped back into a buy zone out of a flat base. RBA stock got a jolt after it was announced the online vehicle and heavy equipment auctioneer will be added to the S&P Midcap 400 prior on June 24, as part of the quarterly rebalance.
RB Global is an online marketplace allowing members to buy and sell heavy equipment, trucks, government surplus and commercial assets. Its platform extends to more than 170 countries.
RBA Stock Back In Buy Zone
Shares pulled back fractionally Monday but remain in the buy zone.
The ecommerce stock bolted in heavy volume and reached the 77.99 buy point of an early stage flat base on May 10. The move came following the company's first-quarter earnings and sales report from the prior day that came in better than expected.
But RBA stock retreated to close below the buy point. The stock weakened and sank below its 50-day moving average in late May. Shares dropped nearly 10% from the buy point, triggering the 7% sell rule.
The stock gapped up nearly 9% on June 10, in heavy trading, lifting it back into the 5% buy zone following the S&P Midcap 400 announcement. The buy zone stretches to 81.89. Shares reclaimed the 50-day line on the move.
RBA stock hit a record high on June 12, and has climbed around 19% so far this year.
Profits, Sales Expected To Fade After Robust Growth
The auctioneer's first-quarter profit increased a healthy 58%, following 36% and 21% in the prior two periods. Its revenue more than doubled for four straight quarters, over the prior year's same quarters.
FactSet expectations are for quarterly earnings to range from a 4% decline to a 3% increase over the next four periods. Meanwhile, quarterly sales projections show modest 1% to 4% growth over the next four periods, after the explosive growth in the last four quarters.
RB Global raised its full-year outlook on earnings before interest, taxes, depreciation and amortization — a measure of profitability commonly known as EBITDA — in its earnings release.
"The increase in our full-year guidance speaks to our commitment to operational excellence and focus on investing in profitable growth," Chief Financial Officer Eric J. Guerin said in the earnings report.
RBA stock holds an IBD Composite Rating of 93 out of a best-possible 99, and an EPS Rating that stands at 98.
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