Strength Seen in Jazz (JAZZ): Can Its 9% Jump Turn into More Strength?

Jazz Pharmaceuticals (JAZZ – Free Report) shares ended the last trading session 9% higher at $146.49. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock’s 9.5% gain over the past four weeks.

Jazz’s strong outlook for 2025 has driven the company’s stock price on Jan 10. The company expects total revenues to grow by more than 60% in the next four years to $5 billion on the back of new product launch and robust performance of older drugs. Jazz’s acquisition of GW Pharmaceuticals has also diversified its revenues streams and the company expects 65% of its product revenues to come from newly launched or acquired products. Jazz is planning to improve its operating margin by 5% from 2021 to 2025 by focusing on disciplined investment.

This drugmaker is expected to post quarterly earnings of $3.63 per share in its upcoming report, which represents a year-over-year change of -9.3%. Revenues are expected to be $863.72 million, up 29.8% 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 Jazz, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock’s price usually doesn’t keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on JAZZ 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 the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>