Earnings

5 Drug/Biotech Stocks Set to Outpace Q4 Earnings Estimates

All big drugmakers have already reported this earnings season and so have several smaller drug and biotech companies.

It was a mixed earnings season for the drug and biotech sector. Most companies beat estimates for earnings while missing the same for sales or vice versa. However, some companies like Merck and Vertex have not only been able to beat consensus estimates but also guide better than market expectations for 2022. There are some smaller biotechs that are yet to report.

Per the Zacks classification, the pharma/biotech industry comes under the broader Medical sector, which comprises pharma/biotech as well as medical device companies.

Per the Earnings Trends report, as of Feb 16, 80.4% of the companies in the Medical sector, constituting nearly 91.5% of the sector’s market capitalization, have reported earnings. Of these, 71.7% of the companies beat earnings as well sales estimates.  Earnings increased 18.5% year over year on 12.7% higher revenues.

Overall, fourth-quarter earnings of the Medical sector are expected to rise 25.8% on a 13.9% sales increase.

Zeroing in on Winners

Here we have highlighted five drug/biotech companies — Evelo Biosciences EVLO, Gamida Cell GMDA, Apellis Pharmaceuticals APLS, iTeos Therapeutics ITOS and Mirati Therapeutics MRTX — which are expected to deliver a beat in their upcoming quarterly results.

Earnings ESP is our proprietary methodology for determining the stocks that have 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 done 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.

5 Drug/Biotech Stocks That Match the Criteria

Evelo Biosciences

This Massachusetts-based company has an Earnings ESP of +12.79% and a Zacks Rank of 3. The Zacks Consensus Estimate for the fourth quarter is pegged at a loss of 57 cents per share. Evelo Biosciences should release results next month.

Evelo Biosciences missed estimates in each of the last four quarters with the average negative surprise being 13.18%.

Evelo Biosciences, Inc. Price and EPS Surprise

Evelo Biosciences, Inc. Price and EPS Surprise

Evelo Biosciences, Inc. price-eps-surprise | Evelo Biosciences, Inc. Quote

You can see the complete list of today’s Zacks #1 Rank stocks here

Gamida Cell

This Israeli biotech has an Earnings ESP of +13.64% and a Zacks Rank of 2. The Zacks Consensus Estimate Gamida Cell’s fourth-quarter bottom line is pegged at a loss of 44 cents per share.

Gamida Cell beat estimates in two of the last four quarters while missing in the other two with the average negative surprise being 22.6%. The company should release results next month.

Gamida Cell Ltd. Price and EPS Surprise

Gamida Cell Ltd. Price and EPS Surprise

Gamida Cell Ltd. price-eps-surprise | Gamida Cell Ltd. Quote

Apellis Pharmaceuticals

This Crestwood, KY-based biotech has an Earnings ESP of +16.07% and a Zacks Rank of #3. The Zacks Consensus Estimate for the fourth quarter is pegged at a loss of $1.32 per share.

Apellis Pharmaceuticals is scheduled to release results on Feb 28.

Apellis Pharmaceuticals beat estimates in only one of the last four quarters while missing in the other three with the average surprise being 41.2%.

Apellis Pharmaceuticals, Inc. Price and EPS Surprise

Apellis Pharmaceuticals, Inc. Price and EPS Surprise

Apellis Pharmaceuticals, Inc. price-eps-surprise | Apellis Pharmaceuticals, Inc. Quote

iTeos Therapeutics

Cambridge, MA-based iTeos Therapeutics has an Earnings ESP of +43.98% and a Zacks Rank of #3. The Zacks Consensus Estimate for the fourth quarter is pegged at $1.28 per share. iTeos Therapeutics should release results next month.

iTeos Therapeutics’ three-quarter average negative surprise is 42.20%.

iTeos Therapeutics, Inc. Price and EPS Surprise

iTeos Therapeutics, Inc. Price and EPS Surprise

iTeos Therapeutics, Inc. price-eps-surprise | iTeos Therapeutics, Inc. Quote

Mirati Therapeutics

San Diego-based Mirati Therapeutics has an Earnings ESP of +6.59% and a Zacks Rank of 3. The Zacks Consensus Estimate for the fourth quarter is pegged at a loss of $3.01 per share. The company is scheduled to release results on Feb 28

Mirati Therapeutics beat estimates in two of the last four quarters while missing in the other two with the average negative surprise being 1.15%.

Mirati Therapeutics, Inc. Price and EPS Surprise

Mirati Therapeutics, Inc. Price and EPS Surprise

Mirati Therapeutics, Inc. price-eps-surprise | Mirati Therapeutics, Inc. Quote

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Mirati Therapeutics, Inc. (MRTX): Free Stock Analysis Report

Apellis Pharmaceuticals, Inc. (APLS): Free Stock Analysis Report

Evelo Biosciences, Inc. (EVLO): Free Stock Analysis Report

Gamida Cell Ltd. (GMDA): Free Stock Analysis Report

iTeos Therapeutics, Inc. (ITOS): Free Stock Analysis Report

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Zacks Investment Research

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

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