Should You Buy, Hold, or Sell BDTX Stock Ahead of Q3 Earnings?

Investors will focus on updates on lead pipeline candidate silevertinib when Black Diamond Therapeutics BDTX reports third-quarter results shortly. The Zacks Consensus Estimate for loss per share is pegged at 22 cents.

Earnings estimate for 2025 has decreased a penny to 35 cents per share while loss per share for 2026 has widened to 89 cents from 82 cents.

BDTX’s Earnings Surprise History

BDTX has an excellent track record. Its earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 1,214%. In the last reported quarter, the company’s earnings beat estimates by 24%.

What Our Model Predicts for BDTX

Per our proven 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.

Earnings ESP for BDTX is -2.68%. The company currently carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Factors Influencing BDTX’s Q3 Results

Since BDTX is a clinical stage company it does not have any approved product in its portfolio and hence does not generate product sales. Nonetheless, the company earns license revenues from its collaboration agreement.

In such a scenario, investors will primarily focus on pipeline updates.

BDTX is developing MasterKey therapies that target families of oncogenic mutations in patients with cancer.

Silevertinib is a brain-penetrant, fourth-generation epidermal growth factor receptor (EGFR) MasterKey inhibitor targeting EGFR-mutant (EGFRm) non-small cell lung cancer (NSCLC) and glioblastoma (GBM).

The candidate was shown to be well tolerated and achieved durable clinical responses in a phase I study in patients with recurrent EGFRm NSCLC whose tumors expressed a range of mutation subtypes, including the acquired C797S resistance mutation and a broad spectrum of non-classical mutations.

BDTX is currently evaluating silevertinib in a phase II study in patients with EGFRm NSCLC in both the recurrent setting (cohorts 1 and 2) and the frontline setting (cohort 3).

In July 2025, enrollment in frontline patients harboring non-classical EGFR mutations (cohort 3, n=43) was completed.  BDTX plans to disclose objective response rates and preliminary duration of response data from all patients with frontline NSCLC and non-classical EGFR mutations in the fourth quarter of 2025.

The developmental plan for silevertinib includes FDA feedback on a potential registrational path in frontline EGFRm NSCLC in the first half of 2026, when progression-free survival data from the ongoing phase II study are available.

BDTX is also exploring potential collaborators to advance silevertinib further NSCLC and glioblastoma. Updates on the same will be expected.

R&D expenses have likely declined in the third quarter due to workforce efficiencies and outlicensing of BDTX-4933 to increase focus on the development of silevertinib.

General and Administrative expenses have also likely declined due to the restructuring announced in October 2024.

BDTX’s Price Performance and Valuation

Year to date, BDTX shares have skyrocketed 78.5% compared with the industry’s growth of 10.5% so far this year. The stock has also outperformed the sector and the S&P 500 Index in this time frame.

BDTX Outperforms Industry, Sector and Index

From a valuation standpoint, BDTX is inexpensive. Going by the price/book ratio, BDTX’s shares currently trade at 1.64x book value, lower than its mean of 1.31x and the biotech industry’s 3.45x.

Investment Thesis for BDTX

The oncology market is one of the most lucrative spaces in the pharma sector. While competition is stiff in the NSCLC space from bigwigs like Johnson & Johnson JNJ and AstraZeneca AZN, silevertinib has shown promise.

Importantly, per BDTX, silevertinib has the potential to treat both newly diagnosed patients with EGFRm NSCLC and those with recurrent disease, due to its ability to target more than 50 classical and non-classical oncogenic driver mutations with greater potency than other EGFR tyrosine kinase inhibitors (TKIs). Furthermore, it targets the C797S resistance mutation, which can emerge after treatment with AZN’s Tagrisso (osimertinib), a leading NSCLC drug.

Black Diamond ended the second quarter of 2025 with approximately $142.8 million in cash and cash equivalents. BDTX believes the cash balance is sufficient to fund its anticipated operating expenses and capital expenditure requirements into the fourth quarter of 2027.

BDTX entered into a global licensing agreement with Servier Pharmaceuticals in March 2025 for its second clinical-stage asset, BDTX-4933, a potential best-in-class targeted therapy for RAF/RAS-mutant solid tumors. The company received an upfront payment of $70.0 million.

Following the outlicensing of its other pipeline candidate, BDTX-4933, to Servier Pharmaceuticals, BDTX is solely focused on the development of silevertinib.

Stay Invested in BDTX Stock

While BDTX’s efforts to develop silevertinib are impressive, the company has only one pipeline candidate as of now. Any setback in the development of silevertinib will be detrimental to investors’ interests.

Irrespective of how the third-quarter results play out, we recommend prospective investors to wait and watch how BDTX advances silevertinib before turning positive.

For investors already owning the stock, staying invested at current levels would be a prudent move as any positive data readout on silevertinib will positively impact the share price.

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This article originally published on Zacks Investment Research (zacks.com).

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