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Penumbra (PEN) Surges 6.2%: Is This an Indication of Further Gains?

Penumbra PEN shares ended the last trading session 6.2% higher at $197.49. 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 7.4% gain over the past four weeks.

Penumbra scored a strong price increase on investors’ optimism surrounding the CE Mark approval of RED Reperfusion Catheters. Post the attainment of regulatory authorization, the company subsequently announced the commercial availability of the RED catheters in Europe. The novel catheters allow for quick and efficient removal of blood clot associated with stroke. These catheters are part of the Penumbra System (a fully integrated mechanical aspiration thrombectomy system), which is intended for restoration of blood flow in acute ischemic stroke patients.

This medical device maker is expected to post quarterly loss of $0.01 per share in its upcoming report, which represents a year-over-year change of -108.3%. Revenues are expected to be $212.54 million, up 11.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Penumbra, 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 PEN going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Penumbra is a member of the Zacks Medical - Instruments industry. One other stock in the same industry, Integra LifeSciences IART, finished the last trading session 0.9% higher at $48.45. IART has returned -14.2% over the past month.

Integra's consensus EPS estimate for the upcoming report has changed -7.3% over the past month to $0.77. Compared to the company's year-ago EPS, this represents a change of -10.5%. Integra currently boasts a Zacks Rank of #3 (Hold).

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