Strength Seen in Sage Therapeutics, Inc. (SAGE): Can Its 11.8% Jump Turn into More Strength?

Sage Therapeutics, Inc. (SAGE) shares soared 11.8% in the last trading session to close at $37. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 5.1% loss over the past four weeks.

Last week, the company announced that it will present data from the phase II LUMINARY study which is evaluating SAGE-718 in patients with mild cognitive impairment and mild dementia due to Alzheimer’s disease. Data from the same showed that treatment with SAGE-718 was generally well-tolerated and associated with improvement on multiple tests of executive performance and learning and memory in the given patient population. This might have been driving the share price rally.

This company is expected to post quarterly loss of $2.15 per share in its upcoming report, which represents a year-over-year change of -31.1%. Revenues are expected to be $4.44 million, up 181.3% 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 Sage Therapeutics, Inc., 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 SAGE 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 >>>>

Sage Therapeutics, Inc. is a member of the Zacks Medical - Drugs industry. One other stock in the same industry, Revolution Medicines, Inc. (RVMD), finished the last trading session 0.6% higher at $25.65. RVMD has returned 40.3% over the past month.

For Revolution Medicines, Inc., the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.61. This represents a change of -15.1% from what the company reported a year ago. Revolution Medicines, Inc. currently has a Zacks Rank of #4 (Sell).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.