Strength Seen in Precision BioSciences (DTIL): Can Its 12.3% Jump Turn into More Strength?

Precision BioSciences (DTIL) shares ended the last trading session 12.3% higher at $9.25. 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 21.7% gain over the past four weeks.

The sudden price rise can be attributed to the growing investor confidence regarding the potential of Precision BioSciences’ clinical-stage pipeline. The company is developing its lead, fully owned in vivo gene editing therapy, PBGENE-HBV, aimed at curing chronic hepatitis B, in an early-to-mid-stage study. The company is also making meaningful progress with its other pipeline candidates.

This genome editing company is expected to post quarterly loss of $0.71 per share in its upcoming report, which represents a year-over-year change of +66.7%. Revenues are expected to be $3.3 million, up 16400% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Precision BioSciences, the consensus EPS estimate for the quarter has been revised 30.4% 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 DTIL 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 >>>>

Precision BioSciences is part of the Zacks Medical - Biomedical and Genetics industry. NeoGenomics (NEO), another stock in the same industry, closed the last trading session 4.4% lower at $14.5. NEO has returned 38.5% in the past month.

For NeoGenomics, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.03. This represents no change from what the company reported a year ago. NeoGenomics 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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