What Happened?

Shares of telecommunications company Dycom (NYSE: DY) jumped 3.5% in the morning session after analysts raised their price targets in response to the company's acquisition of Power Solutions. 

The deal was described as "transformational" by Wells Fargo because it diversified Dycom's revenue by expanding into the data center business. This move was seen as a way to broaden its market and growth prospects. Following the news, KeyBanc raised its price target for Dycom to $426 from $392, noting an improved outlook for growth and margins. Wells Fargo also increased its price target to $360, highlighting the strategic benefits of the acquisition.

After the initial pop the shares cooled down to $377.33, up 3.2% from previous close.

Is now the time to buy Dycom? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Dycom’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 11 months ago when the stock dropped 9.8% on the news that the company reported weak fourth-quarter 2024 results: Its revenue and EBITDA guidance for the next quarter fell short of Wall Street's estimates. On the other hand, Dycom beat analysts' revenue, EBITDA, and EPS expectations this quarter. Overall, this was a mixed yet weaker quarter.

Dycom is up 8.6% since the beginning of the year, and at $377.33 per share, has set a new 52-week high. Investors who bought $1,000 worth of Dycom’s shares 5 years ago would now be looking at an investment worth $4,301.

Microsoft, Alphabet, Coca-Cola, Monster Beverage—all began as under-the-radar growth stories riding a massive trend. We’ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking.Go here for access to our full report, it’s free.