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Strength Seen in Redhill Biopharma Ltd. (RDHL): Can Its 5.4% Jump Turn into More Strength?

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Redhill Biopharma Ltd. (RDHL) shares soared 5.4% in the last trading session to close at $7.05. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 4.8% loss over the past four weeks.

The stock rallied driven by optimism on the receipt of two notices of allowances from the U.S. Patent and Trademark Office which covered opaganib and RHB-107 for COVID-19. Once granted, the two patents will protect opaganib and RHB-107, both investigational oral pills for the treatment of COVID-19, until at least 2041.

Price and Consensus

Price Consensus Chart for RDHL
Price Consensus Chart for RDHL

This company is expected to post quarterly loss of $0.46 per share in its upcoming report, which represents a year-over-year change of +6.1%. Revenues are expected to be $22.37 million, up 2009.9% 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 Redhill Biopharma Ltd., the consensus EPS estimate for the quarter has been revised 14.5% 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 RDHL 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 >>>>

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