Biohaven Ltd. Surges 7.6%: Is This An Indication Of Further Gains?

Biohaven Ltd. (BHVN) shares ended the last trading session 7.6% higher at $13.18. 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 91.8% loss over the past four weeks.

The rise in share price is likely attributable to investors' optimism about the company's new direction, following the acquisition of its calcitonin gene-related peptide (CGRP) business by Pfizer. Post the acquisition, which was closed on Oct 3, Biohaven is advancing its non-CGRP pipeline compounds, which will focus on targeting neurological and neuropsychiatric diseases. Biohaven also has a cash balance of $257.8 million and currently carries no debt.

This company is expected to post quarterly loss of $2.45 per share in its upcoming report, which represents a year-over-year change of +6.8%. Revenues are expected to be $246.61 million, up 81.7% 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 Biohaven Pharmaceutical Holding Company Ltd., the consensus EPS estimate for the quarter has been revised 3.8% 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 BHVN going forward to see if this recent jump can turn into more strength down the road.

Biohaven Pharmaceutical Holding Company Ltd. belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Seattle Genetics (SGEN) , closed the last trading session 0.4% lower at $136.28. Over the past month, SGEN has returned -10.2%.

For Seattle Genetics, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.90. This represents a change of +44.1% from what the company reported a year ago. Seattle Genetics currently has a Zacks Rank of #3 (Hold).


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