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Puma (PBYI) Q3 Earnings: Will it Surpass Estimates Again?


We expect Puma Biotechnology, Inc. PBYI to beat estimates when it reports third-quarter 2017 results on Nov 9 after market close.

The company’s earnings track record has been good so far. It has delivered an average positive surprise of 39.46% in the last four quarters.

Puma’s shares have significantly outperformed the industry on a year-to-date basis. Shares of the company have soared 327.6%, while the industry recorded an increase of 4%.

Last quarter, Puma delivered a positive surprise of 34.29%. Let’s see how things are shaping up for this announcement.

Factors at Play

Puma Biotechnology’s only marketed product, Nerlynx (neratinib) was launched for the treatment of HER2-positive breast cancer in August. So Q3 is the first quarter in which Puma will record sales for Nerlynx.

Nerlynx is also under review in the EU for the same indication with a response expected in early 2018

Several additional studies on neratinib targeting different types of breast cancer patient populations and in earlier-line settings are currently underway. Meanwhile, several phase II combination studies on Nerlynx for the treatment of breast cancer are ongoing.

Apart from the HER2-positive breast cancer indication, the company believes that neratinib holds potential for the treatment of several other cancers as well, including NSCLC and other tumor types that over-express or have a mutation in HER2.

We expect an update on some of these studies at the Q3 conference call.

What Our Model Indicates

Our proven model shows that Puma 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.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate of a loss of $2.24 and the Zacks Consensus Estimate of a loss of $2.75, stands at +18.47%. This is a leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Puma currently carries a Zacks Rank #3. The combination of a Zacks Rank #3 and positive ESP further makes us confident about an earnings surprise.

We caution against the Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks That Warrant a Look

Here are some health care stocks that you may also want to consider, as our model shows that these have the right combination of elements to come up with an earnings beat.

Inovio Pharmaceuticals, Inc. INO is scheduled to release results on Nov 8. The company has an Earnings ESP of +41.79% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pieris Pharmaceuticals, Inc. PIRS is scheduled to release results on Nov 9. The Zacks #3 Ranked company has an Earnings ESP of +2.44%.

Regenxbio Inc. RGNX, scheduled to release results on Nov 8, has a Zacks Rank #2 and an Earnings ESP of +4.23%.

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