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5 Drug/Biotech Stocks Set to Outpace Q2 Earnings Estimates

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All big drugmakers have already reported this earnings season and so have some smaller drug and biotech companies.

Majority of the companies beat estimates for both earnings and sales. Almost all companies witnessed a recovery in sales of their key products/drugs from the earlier impacts of the pandemic in the second quarter and sounded optimistic of continued improvement in the second half. Some companies like J&J and Pfizer raised their expectations for both earnings and sales.

There are, however, some smaller biotechs which are yet to report.

Per the Zacks classification, the pharma/biotech industry comes under the broader Medical sector, which comprises pharma/biotech as well as medical device companies.

Per the Earnings Trends report as of Aug 4, 70.9% of the companies in the Medical sector, constituting nearly 81.9% of the sector’s market capitalization, reported earnings. While 89.7% beat earnings estimates, 97.4% beat the same for sales. Earnings increased 17.7% year over year on 20.3% higher revenues. Overall, second-quarter earnings for the Medical sector are expected to rise 25.7% on 19.2% sales increase.

Zeroing in on Winners

Here we have highlighted five drug/biotech companies — F-star Therapeutics (FSTX - Free Report) , Halozyme Therapeutics (HALO - Free Report) , Kinnate Biopharma (KNTE - Free Report) , Rubius Therapeutics (RUBY - Free Report) and Spruce Biosciences (SPRB - Free Report) — which are expected to deliver a beat in their upcoming quarterly results.

Earnings ESP is our proprietary methodology for determining the stocks that have the best chance to deliver an earnings surprise. Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. The selection can be done with the help of the Zacks Stock Screener.

Our research shows that for stocks with this combination, the chance of an earnings surprise is as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

5 Drug/Biotech Stocks That Match the Criteria

F-star Therapeutics

This Cambridge, MA-based biotech, has an Earnings ESP of +13.44% and a Zacks Rank of 3. The Zacks Consensus Estimate for the second quarter is pegged at a loss of 77 cents per share. The company is scheduled to release results on Aug 12

You can see the complete list of today’s Zacks #1 Rank stocks here

In November last year, F-star Therapeutics merged with Spring Bank Pharmaceuticals and began trading on The Nasdaq from Nov 23. In the first quarter of 2021, the company delivered an earnings surprise of 14.3%.

Fstar Therapeutics, Inc. Price and EPS Surprise

Fstar Therapeutics, Inc. Price and EPS Surprise

 

Fstar Therapeutics, Inc. price-eps-surprise | Fstar Therapeutics, Inc. Quote

Halozyme Therapeutics

This San Diego, CA-based biotech has an Earnings ESP of +52.1% and a Zacks Rank #3. The Zacks Consensus Estimate for the second quarter is pegged at earnings of 43 cents per share. Halozyme beat estimates in two of the last four quarters while missing in the other two with the average surprise being 2.41%. The company is scheduled to release results on Aug 9.

Kinnate Biopharma

This San Diego, CA-based biotech has as an Earnings ESP of +1.15% and a Zacks Rank of #3. The Zacks Consensus Estimate for the second quarter is pegged at a loss of 44 cents per share.

The company closed its initial public offering (IPO) of shares in December and the stock began trading on The Nasdaq from Dec 3, 2020.

In the first quarter of 2021, the company delivered a negative earnings surprise of 8.11%.

Kinnate Biopharma Inc. Price and EPS Surprise

Kinnate Biopharma Inc. Price and EPS Surprise

Kinnate Biopharma Inc. price-eps-surprise | Kinnate Biopharma Inc. Quote

Rubius Therapeutics

This Cambridge, MA biotech has as an Earnings ESP of +15.29% and a Zacks Rank of #3. The Zacks Consensus Estimate for the second quarter is pegged at a loss of 48 cents per share. The company is scheduled to release results on Aug 9.

In the trailing four quarters, Rubius Therapeutics missed estimates in one quarter and beat in the other three with the average surprise being 5.55%.

Rubius Therapeutics, Inc. Price and EPS Surprise

Rubius Therapeutics, Inc. Price and EPS Surprise

Rubius Therapeutics, Inc. price-eps-surprise | Rubius Therapeutics, Inc. Quote

Spruce Biosciences

This Daly City, CA-based late-stage biotech has as an Earnings ESP of +8.21% and a Zacks Rank of #3. The Zacks Consensus Estimate for the second quarter is pegged at a loss of 45 cents per share.

In the trailing three quarters, Spruce Biosciences missed estimates in one quarter and beat in the other two with the average negative surprise being 207.6%. The company closed its IPO in October last year and the stock began trading on The Nasdaq from Oct 9, 2020.

Spruce Biosciences, Inc. Price and EPS Surprise

Spruce Biosciences, Inc. Price and EPS Surprise

Spruce Biosciences, Inc. price-eps-surprise | Spruce Biosciences, Inc. Quote