Can Its 7.4% Jump Turn into More Strength?

Despegar.com (DESP) shares ended the last trading session 7.4% higher at $14.18. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock’s 5.2% gain over the past four weeks.

Despegar.com is being aided by robust revenues driven by strong Take Rate (defined as revenue divided by the sum of Gross Bookings and Total Payment Volume). Gross bookings are also very strong at DESP. Despegar.com’s recent agreement with Nubank has widened its customer base. Driven by the positives, DESP’s shares have gained 50% year to date.

This online travel company is expected to post quarterly earnings of $0.20 per share in its upcoming report, which represents a year-over-year change of +66.7%. Revenues are expected to be $190.59 million, up 7% 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…