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Ironwood (IRWD) Surges 7.6%: Is This an Indication of Further Gains?

Ironwood Pharmaceuticals IRWD shares soared 7.6% in the last trading session to close at $9.26. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 11.4% loss over the past four weeks.

The surge in share price was driven by a significant share acquisition by the company’s insiders. Ironwood's sole marketed product, Linzess is approved for treating irritable bowel syndrome with constipation. Additionally, the company's focus of expanding Linzess's label to include pediatric patients is expected to drive sales in the upcoming quarters.

This drugmaker is expected to post quarterly earnings of $0.17 per share in its upcoming report, which represents a year-over-year change of -39.3%. Revenues are expected to be $113.8 million, up 4.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Ironwood, the consensus EPS estimate for the quarter has been revised 8.1% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on IRWD 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 >>>>

Ironwood belongs to the Zacks Medical - Drugs industry. Another stock from the same industry, Xeris Biopharma XERS, closed the last trading session 1.5% lower at $1.96. Over the past month, XERS has returned -16.7%.

Xeris Biopharma's consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.12. Compared to the company's year-ago EPS, this represents a change of +14.3%. Xeris Biopharma currently boasts a Zacks Rank of #3 (Hold).

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