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Bluebird (BLUE) Surges 18%: Is This an Indication of Further Gains?

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Bluebird Bio (BLUE - Free Report) shares ended the last trading session 18% higher at $5.05. 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 43.6% gain over the past four weeks.

Shares surged as investors are more likely impressed by bluebird’s recent pipeline progress. The company recently received positive recommendation for its gene therapy candidates, for beta thalassemia and cerebral adrenoleukodystrophy (CALD), from FDA’s Cellular, Tissue, and Gene Therapies Advisory Committee (CTGTAC). The CTGTAC voted unanimously recommending the benefits of treatment.

This biotechnology company is expected to post quarterly loss of $1.28 per share in its upcoming report, which represents a year-over-year change of +64.3%. Revenues are expected to be $12.43 million, up 66.4% 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 Bluebird, 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 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, Vanda Pharmaceuticals (VNDA - Free Report) , closed the last trading session 2.8% higher at $11.50. Over the past month, VNDA has returned 12.2%.

For Vanda, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.11. This represents a change of -35.3% from what the company reported a year ago. Vanda currently has a Zacks Rank of #3 (Hold).


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