FOE vs. VSM: Which Stock Should Value Investors Buy Now?
Intrexon Corporation (XON) is expected to report first-quarter 2018 results on May 9, after the market closes.
In the last reported quarter, the company delivered a positive earnings surprise of 45.16%. Intrexon has a mixed surprise history. Over the trailing four quarters, the company surpassed estimates thrice while trailing in one, with an average beat of 16.26%.
Intrexon’s shares have returned 59% year to date, outperforming the industry’s gain of 1.3%.
Factors to Consider
Intrexon’s business model helps it commercialize technologies through exclusive channel collaborations (“ECC”), licensing agreements and joint ventures with collaborators that have market and product development expertise as well as sales and marketing capabilities. This facilitates the company to bring new and improved products and processes in the market. These agreements help Intrexon generate funds in the form of technology access fees and milestones, along with other payments.
Intrexon is collaborating with various companies for developing several candidates. The company teamed up with Fibrocell Science, Inc. FCSC and completed enrolment in a phase I/II study on FCX-007 for recessive dystrophic epidermolysis bullosa. In January 2018, Fibrocell received an approval from the FDA to initiate enrollment of pediatric patients in the phase II portion of the phase I/II study of FCX-007.
Also, the second gene therapy candidate, FCX-013, is being developed by Fibrocell for the treatment of linear scleroderma.
Intrexon’s expanding portfolio of technologies has enabled the company to develop a robust pipeline. The company’s efforts to growth by acquisitions and ECCs are encouraging. Therefore, we expect investor’s focus to remain on the company’s performance along with other developmental updates during the quarterly call.
What Our Model Indicates
Our proven model does not show an earnings beat for Intrexon this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to surpass estimates. That is not the case here, as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -7.22%. This is because both the Most Accurate estimate is pegged at a loss of 26 cents while the Zacks Consensus Estimate stands at a loss of 24 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Intrexon has a Zacks Rank #3 which increases the predictive power of ESP. However, we need to have a positive ESP to be confident of an earnings beat.
Note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some biotech stocks that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this quarter.
Celgene Corporation CELG is scheduled to release results on May 4. The company has an Earnings ESP of +0.63% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Adverum Biotechnologies, Inc. ADVM has an Earnings ESP of +6.9% and currently carries a Zacks Rank #3. The company is expected to release first-quarter results on May 8.
Intrexon Corporation Price and EPS Surprise
Intrexon Corporation Price and EPS Surprise | Intrexon Corporation Quote
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Celgene Corporation (CELG) : Free Stock Analysis Report
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