Investors might want to bet on TFS Financial (TFSL), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this holding company for Third Federal Savings and Loan, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For TFS Financial, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

Current-Quarter Estimate Revisions

For the current quarter, the company is expected to earn $0.07 per share, which is a change of 0% from the year-ago reported number.

The Zacks Consensus Estimate for TFS Financial has increased 16.67% over the last 30 days, as one estimate has gone higher compared to no negative revisions.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $0.29 per share, representing a year-over-year change of +3.57%.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for TFS Financial. Over the past month, one estimate has moved higher compared to no negative revisions, helping the consensus estimate increase 11.54%.

Favorable Zacks Rank

Thanks to promising estimate revisions, TFS Financial currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

While strong estimate revisions for TFS Financial have attracted decent investments and pushed the stock 7.6% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.

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