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What's in the Cards for Zynerba (ZYNE) This Earnings Season?

Zacks Equity Research

In the absence of an approved product, investors’ focus will be on the progress of Zynerba Pharmaceuticals, Inc.’s ZYNE lead pipeline candidate when it reports second-quarter 2019 results.

The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed the same once, with the average positive surprise being 13.18%.

Shares of Zynerba have surged 273.7% so far this year against the industry‘s decline of 4.2%.

In the last reported quarter, Zynerba came up with a positive earnings surprise of 34.33%.

Let’s see how things are shaping up for this announcement.

Things to Watch Out For

Zynerba is focused on developing cannabinoid therapies for rare neuropsychiatric disorders.

The company is developing Zygel, a cannabidiol, targeting multiple neuropsychiatric indications including Fragile X syndrome (“FXS”), autism spectrum disorder, and developmental and epileptic encephalopathies.

A pivotal study is evaluating the candidate for treating patients with FXS aged 3 to 17 years. Data from the study presented earlier showed improvement in core emotional and behavioral symptoms of statistical significance. Zynerba expects to report top-line data in the second half of this year and submit a new drug application next year. The company may provide an update on the progress of the study on its earnings call. In May, the candidate was granted Fast Track designation for FXS.

In May, the company initiated a phase II study to evaluate Zygel as a treatment for 22q11.2 deletion syndrome, a genetic disorder, which may lead to mental illness.

These ongoing studies are likely to drive operating expenses higher in the soon-to-be reported quarter.

Earnings Whispers

Our proven model does not conclusively show that Zynerba is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. But that is not the case here, as you will see below.

Earnings ESP: Zynerba’s Earnings ESP is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at a loss of 50 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Although Zynerba’s Zacks Rank #3 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Zynerba Pharmaceuticals, Inc. Price and Consensus

Zynerba Pharmaceuticals, Inc. Price and Consensus

Zynerba Pharmaceuticals, Inc. price-consensus-chart | Zynerba Pharmaceuticals, Inc. Quote

Stocks That Warrant a Look

Here are some stocks from the pharma sector that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.

Gilead Sciences GILD has an Earnings ESP of +3.69% and a Zacks Rank #2. The company is scheduled to release second-quarter results on Jul 30. You can see the complete list of today’s Zacks #1 Rank stocks here.

Clovis Oncology CLVS has an Earnings ESP of +2.75% and a Zacks Rank #3. The company is scheduled to release second-quarter results on Aug 1.

Anavex Life Sciences AVXL has an Earnings ESP of +5.88% and a Zacks Rank #1.

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