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Celgene (CELG) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Celgene (CELG) closed at $93.81, marking a +0.57% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.12%. Elsewhere, the Dow lost 0.08%, while the tech-heavy Nasdaq added 0.54%.

Prior to today's trading, shares of the biotechnology company had lost 2.11% over the past month. This has lagged the Medical sector's gain of 0.92% and the S&P 500's gain of 3.68% in that time.

Investors will be hoping for strength from CELG as it approaches its next earnings release. On that day, CELG is projected to report earnings of $2.62 per share, which would represent year-over-year growth of 21.3%. Our most recent consensus estimate is calling for quarterly revenue of $4.24 billion, up 11.18% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.72 per share and revenue of $17.12 billion. These totals would mark changes of +20.86% and +12.08%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for CELG. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. The Zacks Consensus EPS estimate remained stagnant within the past month. 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 8.7 right now. This valuation marks a discount compared to its industry's average Forward P/E of 23.42.

Meanwhile, CELG's PEG ratio is currently 0.4. 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 was holding an average PEG ratio of 1.86 at yesterday's closing price.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 67, which puts it in the top 27% 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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