Intrexon Corporation XON is set to report second-quarter 2015 results on Aug 10. Intrexon has an impressive earnings track record with the company delivering positive earnings surprises in three of the four trailing quarters with an average miss of 689.25%. Let’s see how things are shaping up for this announcement.
Factors to Consider
Intrexon operates in a technology-driven environment where success depends on the use of new technology, new product development and product upgrades.
In the second quarter, Intrexon and its partner Fibrocell Science, Inc. FCSC reported positive in vitro pre-clinical data on orphan gene-therapy drug candidate, FCX-007, which is being evaluated for the treatment of recessive dystrophic epidermolysis bullosa. On the R&D front, expenses are expected to increase in the second quarter.
What Our Model Indicates
Our proven model does not conclusively show that Intrexon is likely to beat estimates this quarter. That 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 likely beat expectations. 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 pegged at 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 13 cents per share.
Zacks Rank: Intrexon currently carries a Zacks Rank #2. Although the company’s Zacks Rank #2 enhances the predictive power of the ESP, the ESP of 0.00% makes a surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are a few 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.
The Earnings ESP for Immune Design Corp. IMDZ is +20.41% and it carries a Zacks Rank #3. The company is expected to release results on Aug 13.
Inovio Pharmaceuticals, Inc. INO has an Earnings ESP of +275.00% and carries a Zacks Rank #3. The company is slated to release second-quarter results on Aug 10.
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