Sage Therapeutics, Inc. (SAGE) Soars 9.6%: Is Further Upside Left in the Stock?

·2 min read

Sage Therapeutics, Inc. SAGE shares ended the last trading session 9.6% higher at $43.36. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 12.1% loss over the past four weeks.

The rise in share price is attributable to positive investor expectations for the company’s pipeline focused on developing therapies for brain disorders. The company’s lead pipeline candidate is zuranolone, which is being reviewed by the FDA as a potential treatment for major depressive disorder (MDD) and postpartum depression (PPD) indications. Last week, management announced that the FDA will not hold an advisory committee meeting to discuss the drug's approval. A final decision is expected in early August 2023.

This company is expected to post quarterly loss of $2.50 per share in its upcoming report, which represents a year-over-year change of -20.8%. Revenues are expected to be $2.43 million, up 53.6% 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 Sage Therapeutics, Inc., the consensus EPS estimate for the quarter has been revised 3.6% 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 SAGE 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 >>>>

Sage Therapeutics, Inc. is part of the Zacks Medical - Drugs industry. Nektar Therapeutics NKTR, another stock in the same industry, closed the last trading session 0.8% higher at $1.20. NKTR has returned -59.4% in the past month.

Nektar's consensus EPS estimate for the upcoming report has changed +1.5% over the past month to -$0.22. Compared to the company's year-ago EPS, this represents a change of +55.1%. Nektar currently boasts a Zacks Rank of #2 (Buy).

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