Markets

Will Agios (AGIO) Disappoint Investors this Earnings Season?

Agios Pharmaceuticals, Inc.AGIO is scheduled to report third-quarter 2015 results before the opening bell on Nov 5. Last quarter, the company had posted a negative earnings surprise of 63.46%. Let's see how things are shaping up for this announcement.

Factors at Play This Quarter

Agios, a development-stage biopharmaceutical company, is focused on the development of potential treatments for cancer and rare genetic disorders of metabolism. The company currently has several early-stage candidates in its pipeline. These include AG-221 for IDH2-mutant positive hematologic malignancies (phase I) and IDH2-mutant positive solid tumors (phase I), AG-120 for IDH1-mutant positive hematologic malignancies (phase I) and IDH1-mutant positive solid tumors (phase I), AG-881 for solid tumors with IDH mutation (phase I), and AG-348 for pyruvate kinase deficiency (phase I).

With no approved products in its portfolio, investor focus should remain on the company's pipeline updates since a number of pipeline-related activities are lined up for the rest of 2015.

We note that Agios is collaborating with Celgene CELG for AG-221, AG-120 and AG-881, which will continue to bring in collaboration revenues.

Earnings Whispers

Our proven model does not conclusively show that Agios 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 -2.25%. This is because the Most Accurate estimate is at a loss of 91 cents while the Zacks Consensus Estimate stands at a loss of 89 cents.

Zacks Rank: The combination of Agios' Zacks Rank #4 (Sell) and a negative ESP makes a beat unlikely this season.

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.

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 >>

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

CELGENE CORP (CELG): Free Stock Analysis Report

ALNYLAM PHARMA (ALNY): Free Stock Analysis Report

AGIOS PHARMACT (AGIO): Free Stock Analysis Report

MERRIMACK PHAR (MACK): Free Stock Analysis Report

To read this article on Zacks.com click here.

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.


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

In This Story

MACK AGIO ALNY

Other Topics

Earnings Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More