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Avita Medical Inc. (RCEL) Stock Jumps 6.2%: Will It Continue to Soar?

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Avita Medical Inc. (RCEL - Free Report) shares rallied 6.2% in the last trading session to close at $9.23. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 31.9% gain over the past four weeks.

The rise in stock price is most likely due to the momentum built around the Recell system, Avita's sole marketed product device which produces a suspension of Spray-On Skin cells for treating acute thermal burns in both adults and children. The company also seeks approval for label expansion of the device to include treatment of stable vitiligo and soft tissue repair. If these label expansions were approved, management believes it will be able to cater to a huge market with limited treatment options.

This company is expected to post quarterly loss of $0.32 per share in its upcoming report, which represents a year-over-year change of +5.9%. Revenues are expected to be $8.67 million, up 24.9% 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 Avita Medical Inc., 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 RCEL 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 >>>>

Avita Medical Inc. is part of the Zacks Medical - Drugs industry. Ionis Pharmaceuticals (IONS - Free Report) , another stock in the same industry, closed the last trading session 1.6% higher at $40.02. IONS has returned 5.4% in the past month.

For Ionis Pharmaceuticals, the consensus EPS estimate for the upcoming report has changed +109.8% over the past month to -$1. This represents a change of -170.9% from what the company reported a year ago. Ionis Pharmaceuticals currently has a Zacks Rank of #2 (Buy).


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