United Therapeutics (UTHR) Soars 3.5%: Is Further Upside Left in the Stock?

United Therapeutics UTHR shares soared 3.5% in the last trading session to close at $286.14. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 7.7% loss over the past four weeks.

This rise can be attributed to a recovery in the company's share price, which had been declining over the past couple of sessions following positive results from a pulmonary arterial hypertension (PAH) study conducted by Insmed. The study evaluated a prodrug formulation of UTHR's treprostinil, the active ingredient in its blockbuster Tyvaso products. Unlike Tyvaso, which requires multiple daily doses, Insmed's formulation allows for once-daily dosing.

This drugmaker is expected to post quarterly earnings of $6.87 per share in its upcoming report, which represents a year-over-year change of +17.4%. Revenues are expected to be $796.42 million, up 11.4% 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 United Therapeutics, the consensus EPS estimate for the quarter has been revised 0.7% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on UTHR 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 >>>>

United Therapeutics is part of the Zacks Medical - Drugs industry. BioCryst Pharmaceuticals BCRX, another stock in the same industry, closed the last trading session 2% lower at $10.40. BCRX has returned 7.7% in the past month.

BioCryst's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.02. Compared to the company's year-ago EPS, this represents a change of +133.3%. BioCryst currently boasts a Zacks Rank of #2 (Buy).

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

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