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Agios (AGIO): Will the Stock Disappoint in Q3 Earnings?
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Agios Pharmaceuticals, Inc. (AGIO - Free Report) is scheduled to report third-quarter 2016 results on Nov 3, before the opening bell. Agios performance has been far from encouraging with company missing estimates thrice in the trailing four quarters. Overall, Agios has recorded an average negative earnings surprise of 80.87%.
In the last reported quarter, the company posted a negative surprise of 14.84%. Let’s see how things are shaping up for this quarter.
Factors at Play
Agios, a development-stage biopharmaceutical company, is focused on the development of treatments for cancer and rare genetic metabolic disorders. Being a development-stage company, Agios does not have approved product in its portfolio yet. Investors are thus expected to keep an eye on pipeline updates at the company.
The company has several interesting candidates in its pipeline. Its cancer pipeline comprises enasidenib (IDH2 mutant inhibitor), AG-120 (IDH1 mutant inhibitor) and AG-881 (pan-IDH mutant inhibitor).
During the quarter (ended Sep 2016), Agios revealed through an 8K filing that its collaboration partner Celgene Corporation will submit a new drug application for enasidenib for the treatment of patients with relapsed and/or refractory acute myeloid leukemia by the end of 2016.
We note that Agios is developing enasidenib and AG-881 in collaboration with Celgene, which should bring in collaboration revenues.
Meanwhile, Agios plans to provide a regulatory update on AG-120 by the end of 2016.
The lead candidate in Agios’ rare genetic metabolic disorders programs is AG-348 (phase II), which targets pyruvate kinase-R (PKR) for the treatment of PK deficiency. AG-519 (phase I) is the second candidate that is a potent activator of the PKR enzyme.
What Our Model Indicates
Our proven model does not conclusively show that Agios is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But that is not the case here, as you will see below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -3.31%.
Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Although Agios’ Zacks Rank #3 increases the predictive power of the ESP, its negative ESP makes a surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here are a couple of health care sectors that you may consider instead, as our model shows that they have the right combination of elements to post an earnings beat this quarter.
ARIAD Pharmaceuticals Inc. is expected to release third-quarter results on Nov 1. The company has an Earnings ESP of 5.26% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
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Agios (AGIO): Will the Stock Disappoint in Q3 Earnings?
Agios Pharmaceuticals, Inc. (AGIO - Free Report) is scheduled to report third-quarter 2016 results on Nov 3, before the opening bell. Agios performance has been far from encouraging with company missing estimates thrice in the trailing four quarters. Overall, Agios has recorded an average negative earnings surprise of 80.87%.
In the last reported quarter, the company posted a negative surprise of 14.84%. Let’s see how things are shaping up for this quarter.
Factors at Play
Agios, a development-stage biopharmaceutical company, is focused on the development of treatments for cancer and rare genetic metabolic disorders. Being a development-stage company, Agios does not have approved product in its portfolio yet. Investors are thus expected to keep an eye on pipeline updates at the company.
The company has several interesting candidates in its pipeline. Its cancer pipeline comprises enasidenib (IDH2 mutant inhibitor), AG-120 (IDH1 mutant inhibitor) and AG-881 (pan-IDH mutant inhibitor).
During the quarter (ended Sep 2016), Agios revealed through an 8K filing that its collaboration partner Celgene Corporation will submit a new drug application for enasidenib for the treatment of patients with relapsed and/or refractory acute myeloid leukemia by the end of 2016.
We note that Agios is developing enasidenib and AG-881 in collaboration with Celgene, which should bring in collaboration revenues.
Meanwhile, Agios plans to provide a regulatory update on AG-120 by the end of 2016.
The lead candidate in Agios’ rare genetic metabolic disorders programs is AG-348 (phase II), which targets pyruvate kinase-R (PKR) for the treatment of PK deficiency. AG-519 (phase I) is the second candidate that is a potent activator of the PKR enzyme.
What Our Model Indicates
Our proven model does not conclusively show that Agios is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But that is not the case here, as you will see below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -3.31%.
Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Although Agios’ Zacks Rank #3 increases the predictive power of the ESP, its negative ESP makes a surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
AGIOS PHARMACT Price and EPS Surprise
AGIOS PHARMACT Price and EPS Surprise | AGIOS PHARMACT Quote
Stocks to Consider
Here are a couple of health care sectors that you may consider instead, as our model shows that they have the right combination of elements to post an earnings beat this quarter.
ARIAD Pharmaceuticals Inc. is expected to release third-quarter results on Nov 1. The company has an Earnings ESP of 5.26% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Infinity Pharmaceuticals, Inc. (INFI) with an Earnings ESP of 5.81% and a Zacks Rank #1, will be reporting quarterly results on Nov 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>