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Celgene (CELG) Gains But Lags Market: What You Should Know

Zacks Equity Research

Celgene (CELG) closed the most recent trading day at $98.60, moving +0.22% from the previous trading session. This change lagged the S&P 500's 0.26% gain on the day. Meanwhile, the Dow gained 0.13%, and the Nasdaq, a tech-heavy index, added 0.4%.

Prior to today's trading, shares of the biotechnology company had gained 3.32% over the past month. This has outpaced the Medical sector's gain of 0.32% and lagged the S&P 500's gain of 3.92% in that time.

CELG will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.73, up 19.21% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $4.46 billion, up 14.55% from the year-ago period.

CELG's full-year Zacks Consensus Estimates are calling for earnings of $10.91 per share and revenue of $17.44 billion. These results would represent year-over-year changes of +23% and +14.11%, respectively.

Investors might also notice recent changes to analyst estimates for CELG. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. CELG is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that CELG has a Forward P/E ratio of 9.02 right now. For comparison, its industry has an average Forward P/E of 26.68, which means CELG is trading at a discount to the group.

We can also see that CELG currently has a PEG ratio of 0.42. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Medical - Biomedical and Genetics industry currently had an average PEG ratio of 1.73 as of yesterday's close.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This group has a Zacks Industry Rank of 88, putting it in the top 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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