4 Biotech Stocks Set to Outpace Q4 Earnings Estimates
It has been an interesting earnings season for the Medical sector so far. The sector primarily comprises pharma/biotech and medical device companies.
Several large drug and biotech announced their fourth-quarter results. Most companies beat estimates for earnings but missed on sales. Some, like Pfizer and Merck, beat estimates on both counts. However, both companies expect a nosedive decline in their COVID drug sales as the pandemic has started to subside. Almost all drugmakers announced soft sales and profit guidance for 2023.
The Earnings Trends report indicates that as of Feb 1, 28.6% of the companies in the Medical sector — representing 51.2% of the sector’s market capitalization — reported quarterly earnings. While 81.3% of participants beat on earnings, 62.5% outperformed on revenues. Earnings and revenues increased 3.6% and 7.6% year over year, respectively. Overall, fourth-quarter earnings of the Medical sector are expected to decline by 9.0% while sales are expected to rise by 4.3%, each from the year-ago quarter’s respective reported figures.
Zeroing in on Winners
Here we have highlighted four biotech companies — Allogene Therapeutics ALLO, Editas Medicine EDIT, Intellia Therapeutics NTLA and Seagen SGEN — that are expected to deliver a beat in their upcoming quarterly results.
Earnings ESP is our proprietary methodology for determining the stocks with the best chance to deliver an earnings surprise. Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. The selection can be made with the help of the Zacks Stock Screener.
Our research shows that for stocks with this combination, the chance of an earnings surprise is as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
4 Biotech Stocks That Match the Criteria
Allogene is focused on developing allogenic CAR T therapies for treating cancer, especially hematologic indications with high unmet need. Allogene has an Earnings ESP of +25.70% and a Zacks Rank of 2. The Zacks Consensus Estimate and our model estimates for fourth-quarter earnings stands at a loss of 71 cents and 75 cents per share, respectively.
Allogene beat earnings estimates in each of the last four quarters, delivering a trailing four-quarter earnings surprise of 9.44%, on average.
Allogene Therapeutics, Inc. Price and EPS Surprise
Allogene Therapeutics, Inc. price-eps-surprise | Allogene Therapeutics, Inc. Quote
Editas Medicine is a development-stage genome editing biotech, which makes medicines to treat serious diseases using its proprietary genome editing platform based on the unique CRISPR technology. Editas has an Earnings ESP of +10.76% and a Zacks Rank of 2. The Zacks Consensus Estimate for fourth-quarter earnings stands at a loss of 80 cents per share.
Editas Medicine beat estimates in each of the last four quarters, delivering an average earnings surprise of 11.12%.
Editas Medicine, Inc. Price and EPS Surprise
Editas Medicine, Inc. price-eps-surprise | Editas Medicine, Inc. Quote
A clinical-stage biotech, Intellia Therapeutics is focused on developing therapies utilizing CRISPR/Cas9-technology. Intellia has an Earnings ESP of +6.67% and a Zacks Rank of 2. The Zacks Consensus Estimate and our model estimates for fourth-quarter earnings stand at a loss of $1.38 and $1.40 per share, respectively.
Intellia missed estimates in each of the last four quarters, delivering a negative earnings surprise of 27.91%.
Intellia Therapeutics, Inc. Price and EPS Surprise
Intellia Therapeutics, Inc. price-eps-surprise | Intellia Therapeutics, Inc. Quote
A biotechnology company, Seagen primarily focuses on developing and commercializing therapies targeted for cancer treatment. Seagen has an Earnings ESP of +24.95% and a Zacks Rank of 3. The Zacks Consensus Estimate for the third quarter is pegged at a loss of $1.01 per share.
Seagen beat estimates in two of the last four quarters, while missing the mark on other two occasions. SGEN has a trailing four-quarter earnings surprise of 0.82%, on average. Seagen is scheduled to release results on Feb 15, after market close.
Seagen Inc. Price and EPS Surprise
Seagen Inc. price-eps-surprise | Seagen Inc. Quote
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Seagen Inc. (SGEN) : Free Stock Analysis Report
Editas Medicine, Inc. (EDIT) : Free Stock Analysis Report
Intellia Therapeutics, Inc. (NTLA) : Free Stock Analysis Report
Allogene Therapeutics, Inc. (ALLO) : Free Stock Analysis Report
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