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Xoma (XOMA) Surges 6.4%: Is This an Indication of Further Gains?

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Xoma (XOMA - Free Report) shares rallied 6.4% in the last trading session to close at $28.72. 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 21% gain over the past four weeks.

The sudden surge in the stock price can be attributed to the positive investor mindset regarding Xoma's extensive and growing portfolio of assets, defined as the right to receive potential future payments related to the advancement of an underlying therapeutic candidate. Last 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. The influx of cash has likely strengthened Xoma’s cash position.

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 $8.37 million, up 404.2% 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 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 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 belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, BioMarin Pharmaceutical (BMRN - Free Report) , closed the last trading session 1.4% lower at $84.66. Over the past month, BMRN has returned 2.1%.

BioMarin's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.56. Compared to the company's year-ago EPS, this represents a change of +3.7%. BioMarin currently boasts a Zacks Rank of #4 (Sell).


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