Xoma (XOMA) Soars 15.6%: Is Further Upside Left in the Stock?

Xoma (XOMA) shares soared 15.6% in the last trading session to close at $25.80. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 11.5% loss over the past four weeks.

The company has been doing well with its extensive and growing portfolio of assets, defined as the right to receive potential future payments related to the advancement of an underlying therapeutic candidate. Earlier this month, the company received a milestone payment of $8.1 million from Viracta Therapeutics, related to Day One Biopharmaceuticals’ sale of its Priority Review Voucher to an undisclosed buyer. This might have driven the share price rally.

This drug developer is expected to post quarterly loss of $0.26 per share in its upcoming report, which represents a year-over-year change of +55.9%. Revenues are expected to be $8.12 million, up 389.2% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Xoma, the consensus EPS estimate for the quarter has been revised 38.3% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on XOMA going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Xoma is a member of the Zacks Medical - Biomedical and Genetics industry. One other stock in the same industry, Cue Biopharma, Inc. (CUE), finished the last trading session 3.7% lower at $1.30. CUE has returned -29.3% over the past month.

For Cue Biopharma , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.29. This represents no change from what the company reported a year ago. Cue Biopharma 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

XOMA Corporation (XOMA) : Free Stock Analysis Report

Cue Biopharma, Inc. (CUE) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research