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Lenovo Group Ltd. LNVGY shares soared 5.3% in the last trading session to close at $22.25. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock’s 1.7% gain over the past four weeks.

Lenovo’s stock appreciated on the continued optimism surrounding the personal computer (PC) and mobile internet devices market like tablets and smartphones. The company is benefiting from solid demand for PCs amid the pandemic-led remote-working and online-learning wave.

Per International Data Corporation data, the second-quarter 2021 (April-June) PC shipments increased 13.2% to 83.6 million units. Lenovo was the top vendor with a market share of 23.9%, 30 basis points higher than the year-ago quarter. Its second-quarter PC shipments grew 14.9% year-over-year. Further, the market research firm forecasts 18.2% year-over-year PC shipment growth in 2021.

Moreover, solid recoveries in smartphone sales are aiding Lenovo’s overall financial performance. According to the latest forecast by Gartner, the worldwide sales of smartphones will likely be up 11.4% year over year to 1.5 billion units in 2021. This suggests a sharp improvement from the 10.5% decline registered in 2020.

This company is expected to post quarterly earnings of $0.91 per share in its upcoming report, which represents a year-over-year change of +82%. Revenues are expected to be $17.58 billion, up 21.1% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Lenovo Group Ltd., the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock’s price usually doesn’t keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on LNVGY going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>

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