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Is Intrexon (XON) Likely to Disappoint This Earnings Season?

Intrexon CorporationXON is set to report third-quarter 2015 results on Nov 9. Intrexon has an impressive earnings track record with the company delivering positive earnings surprises in three of the four trailing quarters with an average beat of 679.92%. Let's see how things are shaping up for this announcement.

Factors to Consider

Intrexon operates in a technology-driven environment where success depends on the use of new technology, new product development and product upgrades. The company's business model is to commercialize its technologies through exclusive channel collaborations.

Intrexon is currently developing several candidates in collaboration with Fibrocell Science, Inc. FCSC and other companies. Intrexon and Fibrocell are developing an orphan gene-therapy drug candidate FCX-007 for the treatment of recessive dystrophic epidermolysis bullosa. On the R&D front, expenses are expected to increase in the third quarter.

What Our Model Indicates

Our proven model does not conclusively show that Intrexon is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at -36.00%. This is because the Most Accurate estimate is a loss of 34 cents and the Zacks Consensus Estimate stands at a loss of 25 cents.

Zacks Rank: Intrexon's Zacks Rank #5 (Strong Sell) combined with a negative ESP makes surprise prediction difficult.

Stocks That Warrant a Look

Here are a few health care stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Merrimack Pharmaceuticals, Inc. MACK has an Earnings ESP of +2.44% and carries a Zacks Rank #3. The company is scheduled to release results on Nov 9.

Alnylam Pharmaceuticals, Inc. ALNY has an Earnings ESP of +2.13% and carries a Zacks Rank #3. The company is slated to release results on Nov 9.

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

INTREXON CORP (XON): Free Stock Analysis Report

ALNYLAM PHARMA (ALNY): Free Stock Analysis Report

FIBROCELL SCIEN (FCSC): Free Stock Analysis Report

MERRIMACK PHAR (MACK): 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 Nasdaq, Inc.


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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