Strength Seen in Adamas (ADMS): Can Its 5.9% Jump Turn into More Strength?
Zacks Investment Research | Mar 02, 2021 06:06AM ET
Adamas Pharmaceuticals (NASDAQ:ADMS) ADMS shares rallied 5.9% in the last trading session to close at $5.03. 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 11.6% loss over the past four weeks.
The company’s sole marketed drug, Gocovri, has shown encouraging demand trend during the fourth quarter as patient access to healthcare providers is improving amid the pandemic. The drug is approved to treat dyskinesia in patients with Parkinson’s disease receiving levodopa-based therapy.
Last month, the FDA approved a label expansion of the drug as adjunctive treatment for patients with Parkinson’s disease taking levodopa/carbidopa experiencing OFF episodes. This label expansion will likely boost the company’s revenues going forward in 2021. Moreover, the company expanded its neurology portfolio following the acquisition of global rights to Osmolex ER, a drug approved for Parkinson’s disease and drug-induced extrapyramidal reactions in adults. This drug will also bring additional revenues.
Price and Consensus
This drugmaker is expected to post quarterly loss of $0.47 per share in its upcoming report, which represents a year-over-year change of +20.3%. Revenues are expected to be $19.95 million, up 37.8% 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 Adamas, the consensus EPS estimate for the quarter has been revised 3.7% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on ADMS 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 Zacks Investment Research
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