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Strength Seen in Mesoblast Limited (MESO): Can Its 6.1% Jump Turn into More Strength?

Zacks Equity Research
·2-min read

Mesoblast Limited (MESO) shares ended the last trading session 6.1% higher at $7.66. 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 13.1% loss over the past four weeks.

Last week the company announced positive top-line results from a randomized study which evaluated its pipeline candidate, remestemcel-L in ventilator-dependent COVID-19 patients with moderate/severe acute respiratory distress syndrome. Data from the same showed that treatment with remestemcel-L reduced mortality by 46% in patients under the age of 65 through day 60, but not in patients aged 65 years and above. This might have been driving the rally.

Price and Consensus

Price Consensus Chart for MESO
Price Consensus Chart for MESO

This company is expected to post quarterly loss of $0.10 per share in its upcoming report, which represents a year-over-year change of +28.6%. Revenues are expected to be $22.35 million, up 83.2% from the year-ago quarter.

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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 Mesoblast Limited, 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 MESO 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 >>>>


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Zacks Investment Research