Verastem (VSTM) shares rallied 6.3% in the last trading session to close at $5.4. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock’s 35.1% gain over the past four weeks.
The sudden price rise can be attributed to growing investor confidence in Verastem’s growth prospects related to its marketed product, Avmapki Fakzynja Co-Pack (avutometinib capsules; defactinib tablets), which is approved in the United States for treating KRAS mutant recurrent low-grade serous ovarian cancer (LGSOC). The company is also making meaningful progress with its pipeline, focused on novel small-molecule drugs to treat various types of cancer indications.
This drug developer is expected to post quarterly loss of $0.46 per share in its upcoming report, which represents a year-over-year change of -18%. Revenues are expected to be $23.15 million, up 981.8% 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 Verastem, the consensus EPS estimate for the quarter has been revised 4.8% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn’t usually translate into price appreciation. So, make sure to keep an eye on VSTM 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 >>>>
Verastem is part of the Zacks Medical – Biomedical and Genetics industry. Acadia Pharmaceuticals (ACAD), another stock in the same industry, closed the last trading session 1.6% higher at $26.41. ACAD has returned 22.4% in the past month.
For Acadia, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.06. This represents a change of -62.5% from what the company reported a year ago. Acadia currently has a Zacks Rank of #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).
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