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Chinook (KDNY) Surges 7%: Is This an Indication of Further Gains?

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Chinook Therapeutics (KDNY - Free Report) shares rallied 7% in the last trading session to close at $16.74. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 9.2% loss over the past four weeks.

The company initiated a pivotal study earlier this month on its lead pipeline candidate, atrasentan. The study will evaluate the candidate in patients with IgA nephropathy, a kidney disease. Successful completion of this study may lead to approval of the candidate.

Price and Consensus

Price Consensus Chart for KDNY

This drug developer is expected to post quarterly loss of $0.47 per share in its upcoming report, which represents a year-over-year change of +60.8%. Revenues are expected to be $4.3 million, up 18.5% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Chinook, 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 KDNY 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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