Exelixis Inc At Guggenheim Global Healthcare Conference

Have you been paying attention to shares of Adma Biologics (ADMA)? Shares have been on the move with the stock up 37.3% over the past month. The stock hit a new 52-week high of $23.64 in the previous session. Adma Biologics has gained 397.4% since the start of the year compared to the 4.7% move for the Zacks Medical sector and the 0.7% return for the Zacks Medical - Biomedical and Genetics industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 7, 2024, Adma Biologics reported EPS of $0.15 versus consensus estimate of $0.13 while it beat the consensus revenue estimate by 11.74%.

For the current fiscal year, Adma Biologics is expected to post earnings of $0.52 per share on $425.6 million in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $0.77 per share on $492.67 million in revenues. This represents a year-over-year change of 49.68% and 15.76%, respectively.

Valuation Metrics

Adma Biologics may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

Adma Biologics has a Value Score of D. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 43.5X current fiscal year EPS estimates, which is a premium to the peer industry average of 25.4X. On a trailing cash flow basis, the stock currently trades at 442.4X versus its peer group's average of 18X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Adma Biologics currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Adma Biologics fits the bill. Thus, it seems as though Adma Biologics shares could have potential in the weeks and months to come.

How Does ADMA Stack Up to the Competition?

Shares of ADMA have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Exelixis, Inc. (EXEL). EXEL has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of B.

Earnings were strong last quarter. Exelixis, Inc. beat our consensus estimate by 11.90%, and for the current fiscal year, EXEL is expected to post earnings of $1.99 per share on revenue of $2.16 billion.

Shares of Exelixis, Inc. have gained 37.9% over the past month, and currently trade at a forward P/E of 18.87X and a P/CF of 46.99X.

The Medical - Biomedical and Genetics industry is in the top 29% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ADMA and EXEL, even beyond their own solid fundamental situation.

Zacks Investment Research

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.

While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.

Below, we take a look at Exelixis (EXEL), a company that currently holds a Momentum Style Score of B. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.

It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Exelixis currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.

You can see the current list of Zacks #1 Rank Stocks here

Set to Beat the Market?

In order to see if EXEL is a promising momentum pick, let's examine some Momentum Style elements to see if this drug developer holds up.

Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.

For EXEL, shares are up 22.43% over the past week while the Zacks Medical - Biomedical and Genetics industry is down 0.75% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 38.2% compares favorably with the industry's 2.78% performance as well.

Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Shares of Exelixis have increased 37.57% over the past quarter, and have gained 72.62% in the last year. In comparison, the S&P 500 has only moved 13.08% and 38.58%, respectively.

Investors should also take note of EXEL's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now, EXEL is averaging 2,898,878 shares for the last 20 days.

Earnings Outlook

The Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock's price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with EXEL.

Over the past two months, 10 earnings estimates moved higher compared to 1 lower for the full year. These revisions helped boost EXEL's consensus estimate, increasing from $1.79 to $1.92 in the past 60 days. Looking at the next fiscal year, 9 estimates have moved upwards while there have been 2 downward revisions in the same time period.

Bottom Line

Given these factors, it shouldn't be surprising that EXEL is a #2 (Buy) stock and boasts a Momentum Score of B. If you're looking for a fresh pick that's set to soar in the near-term, make sure to keep Exelixis on your short list.

Zacks Investment Research

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.

Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.

Zacks Premium includes access to the Zacks Style Scores as well.

What are the Zacks Style Scores?

The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value Score

Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth Score

Growth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.

Momentum Score

Momentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.

VGM Score

If you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.

How Style Scores Work with the Zacks Rank

The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.

Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +25.41% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.

That's where the Style Scores come in.

You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only as a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Exelixis (EXEL)

Alameda, CA-based Exelixis, Inc. is an oncology-focused biotechnology company that primarily focuses on the discovery, development and commercialization of new drugs for the treatment of difficult-to-treat cancers. The company is leveraging its investments, expertise and strategic partnerships to target an expanding range of tumor types and indications with its clinically differentiated pipeline of small molecules, antibody-drug conjugates (ADCs) and other biotherapeutics.

EXEL is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.

Momentum investors should take note of this Medical stock. EXEL has a Momentum Style Score of B, and shares are up 38.2% over the past four weeks.

For fiscal 2024, 10 analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.13 to $1.92 per share. EXEL boasts an average earnings surprise of 26.5%.

With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, EXEL should be on investors' short list.

Zacks Investment Research

Gilead Sciences, Inc. GILD reported better-than-expected third-quarter results and raised its annual earnings guidance.

Adjusted earnings per share (EPS) of $2.02 beat the Zacks Consensus Estimate of $1.58. In the year-ago quarter, the company reported adjusted earnings of $2.29 per share.

The year-over-year decrease was due to higher acquired IPR&D and tax expenses.

Total revenues of $7.5 billion beat the Zacks Consensus Estimate of $7 billion. Revenues also increased 7% year over year, primarily due to higher HIV, Veklury, oncology and liver disease drug sales.

The stock was up 2% in after-market trading on Nov. 6 in response to better-than-expected quarterly results and raised guidance. The stock is also up in pre-market trading today.

Gilead’s shares have risen 13.2% year to date against the industry's decline of 2.5%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

GILD’s Q3 Highlights

Total product sales rose 7% year over year to $7.5 billion. Excluding Veklury, product sales increased 7% to $6.8 billion.

HIV product sales grew 9% year over year to $5.1 billion, driven by a higher average realized price due to increased demand. The figure beat the Zacks Consensus Estimate of $4.8 billion and our model estimate of $4.9 billion.

Flagship HIV therapy Biktarvy’s sales increased 13% year over year to $3.5 billion, driven by higher demand and average realized price. The reported number beat both the Zacks Consensus Estimate and our model estimate of $3.4 billion.

Per GILD, Biktarvy accounts for more than 49% share of the treatment market in the United States.

Descovy (FTC 200 mg/TAF 25 mg) sales increased 15% year over year to $586 million, driven by higher demand and average realized price. The reported number beat the Zacks Consensus Estimate of $525 million and our model estimate of $520 million.

The Liver Disease portfolio sales, which include chronic HCV, chronic hepatitis B virus and chronic hepatitis delta virus, increased 4% to $733 million. The increase was driven by higher demand for viral hepatitis medicines.

Veklury sales increased 9% to $692 million, driven by increased rates of COVID-19 related hospitalizations, particularly in the United States. Sales beat the Zacks Consensus Estimate of $296 million and our model estimate of $237.1 million.

Cell Therapy product (comprising Yescarta and Tecartus) sales were flat year over year at $485 million. The figure missed the Zacks Consensus Estimate of $541 million and our model estimate of $580.9 million.

Yescarta sales decreased 1% year over year to $387 million due to competition in the United States.

Tecartus (adult acute lymphoblastic leukemia) sales increased 2% year over year to $98 million, driven by increased demand.

Breast cancer drug Trodelvy’s sales increased 17% year over year to $332 million, primarily driven by higher demand in all regions. However, Trodelvy's sales missed the Zacks Consensus Estimate of $354 million and our model estimate of $337.5 million.

Cost Analysis

Adjusted product gross margin increased to 86.8% from 85.9% in the year-ago quarter due to product mix.

Research and development expenses totaled $1.4 billion, down from $1.5 billion in the year-ago quarter. This was due to the timing of clinical activities, including the winding down of studies on magrolimab and obeldesivir.

SG&A expenses amounted to $1.4 billion, up 8.2% due to the timing of commercial activities, including the launch of Livdelzi (seladelpar) in the United States, and other corporate activities.

Acquired IPR&D expenses totaled $505 million, driven by a $320 million charge related to the buy-out of global Livdelzi royalties from Janssen Pharmaceutica NV and payments related to ongoing collaborations.

GILD Raises 2024 Guidance

Product sales are now projected to be between $27.8 billion and $28.1 billion (previous guidance: $27.1-$27.5 billion). Total product sales, excluding Veklury, are now expected to be between $26 billion and $26.3 billion (previous guidance: $25.8 billion to $26.2 billion).

Total Veklury sales are now estimated to be $1.8 billion (previous guidance: $1.3 billion).

Adjusted EPS is now anticipated to be in the range of $4.25-$4.45, up from the previous guidance of $3.60-$3.90.

Pipeline Updates

The FDA granted accelerated approval to seladelpar for the treatment of primary biliary cholangitis (PBC), in combination with ursodeoxycholic acid (UDCA), in adults who have had an inadequate response to UDCA, or as monotherapy in patients unable to tolerate UDCA.

The candidate was approved under the brand name Livdelzi. Seladelpar was added to GILD’s portfolio/pipeline through the acquisition of CymaBay Therapeutics Inc. for $4.3 billion in March 2024. The approval of Livdelzi strengthens GILD’s liver disease portfolio.

Gilead also announced that it will voluntarily withdraw Trodelvy’s use in pre-treated adult patients with locally advanced or metastatic urothelial cancer in the United States, following the results of the phase III TROPiCS-04 trial announced in May 2024.

GILD announced the results of PURPOSE 2, the second phase III study of twice-yearly lenacapavir for HIV prevention. 99.9% of participants did not acquire HIV infection in the lenacapavir group, with 2 incident cases among 2,179 participants. Lenacapavir reduced HIV infections by 96% compared to background HIV incidence in cisgender men and gender-diverse people, and additionally demonstrated superiority to daily Truvada.

Gilead expects to file for approval of lenacapavir for HIV prevention before the end of the year.

Our Take on GILD's Q3 Performance

Gilead’s third-quarter results were impressive as Biktarvy maintained its dominant position for HIV treatment across major markets.

The growth in Veklury sales benefited the company’s quarterly results.

The positive data on lenacapavir bodes well. Per GILD, lenacapavir, with its twice-yearly dosing, could set a new bar for HIV prevention and allow PrEP to reach larger number of people who could benefit from a prevention regimen.

Approval of better HIV treatments should strengthen the HIV franchise in the wake of increasing competition from the likes of GSK plc GSK.

GSK posted 8% growth in HIV sales, driven by strong patient demand for two drug regimens — Dovato and Juluca — and long-acting drugs (Cabenuva and Apretude).

GILD's Zacks Rank & Stocks to Consider

Gilead currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the biotech sector are Amicus Therapeutics FOLD and Exelixis EXEL. While FOLD sports a Zacks Rank #1 (Strong Buy), EXEL carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 90 days, estimates for Amicus Therapeutics’ 2024 EPS have moved up from 20 to 22 cents. EPS estimates for 2025 have remained stable at 53 cents during the same period. FOLD’s earnings beat estimates in three of the trailing four quarters and missed the mark once, delivering an average surprise of 23.96%.

Estimates for EXEL’s 2024 EPS have increased 30 cents to $1.83 in the past 90 days. Shares of EXEL have risen 48% year to date.

Zacks Investment Research

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.

Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.

It also includes access to the Zacks Style Scores.

What are the Zacks Style Scores?

The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.

Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.

The Style Scores are broken down into four categories:

Value Score

Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth Score

Growth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

Momentum Score

Momentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM Score

If you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.

How Style Scores Work with the Zacks Rank

The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.

Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +25.41% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.

That's where the Style Scores come in.

You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only as a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Exelixis (EXEL)

Alameda, CA-based Exelixis, Inc. is an oncology-focused biotechnology company that primarily focuses on the discovery, development and commercialization of new drugs for the treatment of difficult-to-treat cancers. The company is leveraging its investments, expertise and strategic partnerships to target an expanding range of tumor types and indications with its clinically differentiated pipeline of small molecules, antibody-drug conjugates (ADCs) and other biotherapeutics.

EXEL is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.

It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 18.51; value investors should take notice.

For fiscal 2024, 10 analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.13 to $1.92 per share. EXEL boasts an average earnings surprise of 26.5%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, EXEL should be on investors' short list.

Zacks Investment Research