CareDx CDNA shares soared 7% in the last trading session to close at $12.75. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 37.4% loss over the past four weeks.
CareDx recorded a strong price rise on investors’ optimism following the announcement of a proposed draft Local Coverage Determination ("LCD") by Medicare Administrative Contractors related to molecular testing for solid organ allograft rejection. The draft LCD maintains current coverage for non-invasive surveillance testing in kidney, heart, and lung transplant patients without requiring protocol biopsies. Per the Management, the draft LCD confirms support for their surveillance tests and shows that these tests help improve health for transplant patients.
This molecular diagnostics company is expected to post quarterly earnings of $0.12 per share in its upcoming report, which represents a year-over-year change of -52%. Revenues are expected to be $90.72 million, down 1.7% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For CareDx, 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 CDNA 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 >>>>
CareDx belongs to the Zacks Medical Services industry. Another stock from the same industry, Sonida Senior Living SNDA, closed the last trading session 0.5% higher at $24.83. Over the past month, SNDA has returned 3%.
For Sonida Senior Living, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.78. This represents a change of +9.3% from what the company reported a year ago. Sonida Senior Living currently has a Zacks Rank of #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
