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Momentum

Spectrum Pharmaceuticals, Inc. (SPPI - Snapshot Report) saw huge gains in October, jumping more than 50% after posting a huge Q2 earnings surprise of 222%. With estimates on the rise and a high industry rank, this Zacks #1 Rank stock is a biotech with plenty of momentum.

Company Description

Spectrum Pharmaceuticals, Inc. is a commercial stage biotechnology company that focuses on oncology and hematology. The company was founded in 1987 and has a market cap of $633 million.

SPPI got a big lift from the bullish market in October, but shares also gained traction from awesome Q3 results late in the month that came in well ahead of expectations.

Third-Quarter Results

Revenue for the period was up 205% from last year to $51 million. Earnings also came in strong at 29 cents, 222% ahead of the Zacks Consensus Estimate, where Spectrum has one match and three big beats in the last four quarters.

The good quarter was driven by incredible gains in FUSILEV, a chemotherapy agent used in the treatment of colorectal cancer, where sales jumped to $41 million from $6 million last year.

Financial Profile

Spectrum has used its earnings momentum to strengthen its financial profile, with cash and short-term investments up $64 million to $149 million against no long-term debt.

Estimates

We saw some very bullish movement in estimates off the good quarter, with the current year up 53% to $1.04.

Valuation

But in spite of the gains, the valuation picture still looks solid, with SPPI's forward P/E of 11X a discount to its industry average of 15X.

12-Month Chart

On the chart, shares rallied hard in October to hit a new all-time high. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Whisper Trader Service.

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