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Vertex (VRTX) Surges 5.3%: Is This an Indication of Further Gains?

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Vertex Pharmaceuticals (VRTX - Free Report) shares soared 5.3% in the last trading session to close at $461.68. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8% gain over the past four weeks.

Last week, the company announced that the FDA has approved its oral, non-opioid, highly selective NaV1.8 pain signal inhibitor, suzetrigine, for the treatment of adults with moderate-to-severe acute pain. The drug will be marketed by the name of Journavx. Following the nod, Journavx became the first and only non-opioid oral pain signal inhibitor and the first new class of pain medicine to be approved by the FDA in more than 20 years. This might have driven the recent share price rally.

This drugmaker is expected to post quarterly earnings of $4 per share in its upcoming report, which represents a year-over-year change of -4.8%. Revenues are expected to be $2.77 billion, up 10.2% 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 Vertex, the consensus EPS estimate for the quarter has been revised 2% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on VRTX 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 >>>>

Vertex is a member of the Zacks Medical - Biomedical and Genetics industry. One other stock in the same industry, Foghorn Therapeutics Inc. (FHTX - Free Report) , finished the last trading session 3.5% lower at $4.19. FHTX has returned -5.5% over the past month.

For Foghorn Therapeutics, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.27. This represents a change of +52.6% from what the company reported a year ago. Foghorn Therapeutics currently has a Zacks Rank of #2 (Buy).


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