What Falling Estimates & Price Mean for Kythera (KYTH) - Tale of the Tape

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Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is Kythera Biopharmaceuticals, Inc. ( KYTH ), which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #4 (Sell) further confirms weakness in KYTH.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 3 estimates moving down in the past 30 days, with no upward revision. The trend has caused the consensus estimate to trend downward; that is a loss of $2.34 a share a month ago became wider to its current level of a loss of $2.75.

Also, for the current quarter, Kythera has seen 1 downward estimate revision versus no revision in the upside, dragging the consensus estimate down to a loss of 66 cents a share from a loss of 47 cents over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 23% in the past month.

So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don't have a long time horizon to wait.

If you are still interested in the Medical sector, you may instead consider some better-ranked stocks including Alexion Pharmaceuticals, Inc. ( ALXN ), Alkermes plc ( ALKS ) and ANI Pharmaceuticals, Inc. ( ANIP ). All these of these carry a Zacks Rank #1 (Strong Buy) and may be better selections at this time.

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ALKERMES INC (ALKS): Free Stock Analysis Report

ALEXION PHARMA (ALXN): Free Stock Analysis Report

ANI PHARMACEUT (ANIP): Free Stock Analysis Report

KYTHERA BIOPHRM (KYTH): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks

Referenced Stocks: ALKS , ALXN , ANIP , KYTH

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