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Reata Pharmaceuticals, Inc. (RETA) Soars 6.3%: Is Further Upside Left in the Stock?

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Reata Pharmaceuticals, Inc. (RETA - Free Report) shares ended the last trading session 6.3% higher at $49.50. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 30.2% gain over the past four weeks.

A final decision on the company’s FDA filing seeking approval for its lead pipeline candidate omaveloxolone in Friedreich's ataxia (FA) is expected by the end of this month. Last October, management had announced that the FDA had decided not to hold an advisory committee (AdCom) meeting to review the filing. Share price likely rose as investors anticipate a favorable decision from the regulator.

This company is expected to post quarterly loss of $2.12 per share in its upcoming report, which represents a year-over-year change of +9.8%. Revenues are expected to be $1.4 million, up 50.5% 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 Reata Pharmaceuticals, Inc., 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 RETA 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 >>>>

Reata Pharmaceuticals, Inc. is part of the Zacks Medical - Biomedical and Genetics industry. Voyager Therapeutics (VYGR - Free Report) , another stock in the same industry, closed the last trading session 5.1% lower at $8.88. VYGR has returned 56% in the past month.

Voyager Therapeutics' consensus EPS estimate for the upcoming report has changed +413.4% over the past month to -$0.57. Compared to the company's year-ago EPS, this represents a change of -480%. Voyager Therapeutics currently boasts a Zacks Rank of #2 (Buy).

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