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KemPharma (KMPH) Moves 42.8% Higher: Will This Strength Last?

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KemPharma (KMPH - Free Report) shares soared 42.8% in the last trading session to close at $13.47. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 45.1% gain over the past four weeks.

The FDA approved the company’s new drug application for its attention deficit hyperactivity disorder (“ADHD”), Azstarys, on Mar 2 that drove the stock price. The ADHD market represents a significant opportunity due its size. It accounted for almost $17.9 billion of revenue in 2019 with a year-over-year prescription growth rate of greater than 4%.

Price and Consensus

Price Consensus Chart for KemPharma

This specialty pharmaceutical company is expected to post quarterly loss of $0.64 per share in its upcoming report, which represents a year-over-year change of +77.8%. Revenues are expected to be $1.97 million, up 42.4% 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 KemPharma, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on KMPH 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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