Amarin (AMRN) Soars 27.3%: Is Further Upside Left in the Stock?

Amarin (AMRN) shares rallied 27.3% in the last trading session to close at $16.04. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 13.4% gain over the past four weeks.

The stock surged 27% after Amarin licensed EU rights to Vazkepa to Italy-based Recordati, securing $25M upfront, up to $150M in milestones, and ongoing royalties. The deal significantly expands Vazkepa’s market reach while cutting EU-related costs by an expected $70M over 12 months, supporting Amarin’s shift to a leaner model and accelerating its path to positive cash flow.

This biopharmaceutical company is expected to post quarterly loss of $0.60 per share in its upcoming report, which represents a year-over-year change of -400%. Revenues are expected to be $45.19 million, down 33% 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 Amarin, the consensus EPS estimate for the quarter has been revised 22.4% 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 AMRN going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Amarin is a member of the Zacks Medical - Biomedical and Genetics industry. One other stock in the same industry, MannKind (MNKD), finished the last trading session 5.1% higher at $3.99. MNKD has returned -7.9% over the past month.

For MannKind, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.04. This represents a change of -20% from what the company reported a year ago. MannKind currently has a Zacks Rank of #3 (Hold).

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

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