Hi System...I am long AEGR too. When u say earnings surprise, do u mean by a wide margin or just above expectations? just out of curiosity: how much do u think the stock price will jump after the results?
Above expectations, but it could be quite a bit above. I base this on increased patients and retention of current patients based on a small sampling I've done. I think a move into the high $40's is very much in the cards. This is based on the traditional models driven by revenue and earnings, applied to the market cap of the stock/company.
The real issue is that I don't know what the institutional investors are really expecting, just what is published. The analyst forecasts are pretty aggressive, and I expect AEGR to even beat those estimates. Current estimates are for a loss of $0.72/share, though I expect it to be substantially lower. Still a loss, just a lot smaller loss than people were expecting.
Another issue is that this stock is easily manipulated by shorts because volume is pretty thin, as we saw this morning, one hedge fund manager can sell short 15K shares and drop the stock 3.5% in a few minutes. That can make it appear to be more of a move than it really is, except that the volume exposes it as a minor move.
They will beat next quarter consensus estimates by a wide margin. Then the shorts will shift their claims of corruption to under estimated EPS. Right now the shorts claim EPS and revenue projections are unrealistic. Of course they also admit they didn't do even the most rudimentary due diligence, but ANYway. Watch them flip their story when earnings beat substantially.