Veracyte (VCYT) Surges 10.8%: Is This an Indication of Further Gains?

Veracyte VCYT shares ended the last trading session 10.8% higher at $48.54. 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 1.1% loss over the past four weeks.

Veracyte scored a strong price increase on investors’ optimism following its acquisition of Convergent Genomics. The acquisition expanded Veracyte’s product portfolio with Convergent Genomics’ UroAmp platform, including its proprietary urinary tumor DNA (utDNA) technology. 

This molecular diagnostic company is expected to post quarterly earnings of $0.43 per share in its upcoming report, which represents a year-over-year change of -15.7%. Revenues are expected to be $147.11 million, up 11.6% 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 Veracyte, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on VCYT going forward to see if this recent jump can turn into more strength down the road.

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

Veracyte is a member of the Zacks Medical - Instruments industry. One other stock in the same industry, Delcath Systems, Inc. DCTH, finished the last trading session 0.8% higher at $16.08. DCTH has returned -2.7% over the past month.

For Delcath Systems, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.1. This represents a change of -600% from what the company reported a year ago. Delcath Systems currently has a Zacks Rank of #1 (Strong Buy).

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

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