Bluebird (BLUE) Surges 15.7%: Is This an Indication of Further Gains?

Bluebird Bio (BLUE) shares soared 15.7% in the last trading session to close at $6.86. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 0.3% gain over the past four weeks.

Shares surged as investors are impressed by bluebird’s recent pipeline progress. The company recently received accelerated FDA approval for its gene therapy candidate, Syskona (eli-cel) for cerebral adrenoleukodystrophy (CALD). FDA also lifted the clinical hold on the eli-cel clinical development program. Bluebird’s other gene therapy candidate Zynteglo (beti-cel) for beta-thalassemia was approved by the FDA in August.

This biotechnology company is expected to post quarterly loss of $1.27 per share in its upcoming report, which represents a year-over-year change of +56.7%. Revenues are expected to be $2.15 million, down 90.5% 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 Bluebird, the consensus EPS estimate for the quarter has been revised 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 BLUE 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 >>>>

Bluebird belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Insmed (INSM), closed the last trading session 1.5% lower at $23.78. Over the past month, INSM has returned -5.3%.

For Insmed , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.87. This represents a change of +9.4% from what the company reported a year ago. Insmed currently has a Zacks Rank of #3 (Hold).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
bluebird bio, Inc. (BLUE) : Free Stock Analysis Report
 
Insmed, Inc. (INSM) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research