Can Its 9% Jump Turn into More Strength?

This story originally appeared on Zacks

Shares of Jazz Pharmaceuticals Inc. (JAZZ) closed the last trading session 9% higher at $146.49. The jump came in impressive volume with an above average number of shares traded in the session. This compares to the stock’s 9.5% gain over the past four weeks.

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Jazz’s strong forecast for 2025 drove the company’s stock price on January 10. The company expects total revenue to grow by more than 60% in the next four years to $5 billion on the back of new product launches and strong performance for older drugs. Jazz’s acquisition of GW Pharmaceuticals has also diversified its revenue sources and the company expects 65% of its product revenue to come from newly launched or acquired products. Jazz plans to improve operating margin by 5% from 2021 to 2025 by focusing on disciplined investing.

This pharmaceutical company is expected to report quarterly earnings of $3.63 per share in its upcoming report, which represents a year-over-year change of -9.3%. Revenue is expected to be $863.72 million, up 29.8% from the previous year quarter.

Earnings and revenue growth forecasts certainly give a good sense of the stock’s potential strength, but empirical research shows that trends in earnings estimate revisions are closely related to near-term stock price movements.

For jazz, the consolidated earnings per share estimate for the quarter has been unchanged for the past 30 days. Usually the stock price does not continue to rise in the absence of any trend in the earnings estimate revisions. So, be sure to keep an eye on the JAZZ ahead to see if that last jump can turn into more power down the road.

The stock currently has a Zacks 3 (Hold) rating. You can see the full list of Zacks #1 ranked stocks (strong buy) here >>>>

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