Ultragenyx (RARE) Surges 12.6%: Is This an Indication of Further Gains?

Ultragenyx (RARE) shares ended the last trading session 12.6% higher at $14.5. 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 50.9% loss over the past four weeks.

Shares moved higher following the FDA’s full approval of Ultragenyx’s Fayuvi (rebisufligene etisparvovec-hopf), also known as UX111, for treating the neurologic manifestations of mucopolysaccharidosis type IIIA (MPS IIIA or Sanfilippo syndrome Type A) in pediatric patients with preserved neurodevelopmental function. The approval makes Fayuvi the first FDA-approved treatment for this rare and fatal neurodegenerative disorder and marks RARE’s second gene therapy approval and sixth FDA approval overall. The approval was supported by nearly eight years of clinical data, including a 23.5-point higher mean change in Bayley-III Cognitive raw score versus an untreated natural-history cohort.

This biotechnology company is expected to post quarterly loss of $0.65 per share in its upcoming report, which represents a year-over-year change of +64.1%. Revenues are expected to be $185.2 million, up 15.8% 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 Ultragenyx, the consensus EPS estimate for the quarter has been revised 6.4% 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 RARE 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 >>>>

Ultragenyx belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Rhythm Pharmaceuticals, Inc. (RYTM), closed the last trading session 1% higher at $99.02. Over the past month, RYTM has returned -15.3%.

Rhythm Pharmaceuticals' consensus EPS estimate for the upcoming report has changed -2.4% over the past month to -$0.68. Compared to the company's year-ago EPS, this represents a change of +17.1%. Rhythm Pharmaceuticals 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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