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Geron (GERN) Q4 Earnings: What's in Store for the Stock?

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Geron Corporation (GERN - Free Report) is expected to report fourth-quarter 2016 results next week.

In the last reported quarter, the company recorded a positive earnings surprise of 66.67%. Let’s see how things are shaping up for the upcoming announcement.

Geron’s shares outperformed the Zacks classified Medical - Biomedical and Genetics industry by adding 10.2% so far this year, while the industry witnessed a gain of 7.4%.



Imetelstat Remains in Focus

With no approved product in its portfolio, Geron’s top line solely comprises license fees and royalties. In such a scenario, investor focus will remain on the company’s pipeline. Geron currently has one candidate in its pipeline, imetelstat. It is being developed in collaboration with Johnson & Johnson’s (JNJ - Free Report) Janssen Biotech for treatment of hematologic myeloid malignancies like myelofibrosis (MF), myelodysplastic syndromes (MDS) and acute myelogenous leukemia (AML).

The company’s shares took a hit in Sep 2016 when the company announced unfavorable findings from planned internal reviews of initial data from the two studies – IMbark (phase II) for the treatment of myelofibrosis, and IMerge (phase II/III) for the treatment of myelodysplastic syndromes.

The company, however, continues to evaluate imetelstat in the 9.4 mg/kg dosing arm. In addition to updates on imetelstat, investors will also be interested in knowing if Geron has made any progress in expanding its pipeline. The company is seeking to add new oncology candidates, programs or companies to its portfolio with focus on the hematology-oncology space. The company is planning to pursue business development deals that would expand and diversify its pipeline.

Like all development-stage companies, Geron too will to see a rise in research and development expenses.

Surprise History

Geron’s performance over the last four quarters has been mixed, with the company surpassing expectations twice and meeting the same twice. The average positive surprise over the last four quarters is 23.81%.

Geron Corporation Price and EPS Surprise

 

Geron Corporation Price and EPS Surprise | Geron Corporation Quote

Earnings Whispers

Our proven model does not conclusively show that Geron is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. But that is not the case here, as you will see below.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate Estimate and the current Zacks Consensus Estimate stand at a loss of 6 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Although Geron’s Zacks Rank #3 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult this quarter.

Note that we caution against stocks with Zacks Ranks #4 or 5 (Sell-rated) going into an earnings announcement, especially when the company is seeing a negative estimate revision momentum.

Stocks That Warrant a Look

Here are a couple of health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Pacira Pharmaceuticals, Inc. (PCRX - Free Report) is expected to release results on Feb 23. The company has an Earnings ESP of +20% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Exact Sciences Corporation (EXAS - Free Report) has an Earnings ESP of +5% and a Zacks Rank #2. The company is expected to release results on Feb 21.

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