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Alector (ALEC) Surges 8%: Is This an Indication of Further Gains?

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Alector ALEC shares soared 8% in the last trading session to close at $15.86. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 28.9% loss over the past four weeks.

This clinical-stage biotechnology company is investing in immuno-neurology, a novel therapeutic approach for the treatment of neurodegenerative diseases. The market represents significant potential. The company has advanced four product candidates, AL001, AL002, AL003, and AL101, into clinical development. Shares rallied as investors are mostly likely upbeat about the progress the company has made and the market that the company is targeting.

This biotechnology company is expected to post quarterly earnings of $0.02 per share in its upcoming report, which represents a year-over-year change of +103%. Revenues are expected to be $75.34 million, up 1453.5% 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 Alector, 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 ALEC 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 >>>>


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