Signal stock

Soaring earnings estimates point to a rise in Innoviva (INVA) shares

Innoviva (INVA) could be a solid choice for investors given the remarkable improvement in the company’s earnings outlook. Although the stock has been a strong performer of late, this trend may continue as analysts continue to raise their earnings estimates for the company.

The upward trend in estimate revisions, the result of growing analyst optimism about the biopharmaceutical company’s earnings outlook, should be reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and short-term stock price movements. Our stock rating tool – the Zacks Ranking – is primarily based on this idea.

The five-tier Zacks Rank system, which ranges from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally audited track record of outperformanceZacks #1 ranked stock generating an average annual return of +25% since 2008.

Consensus earnings estimates for the next quarter and full year rose significantly for Innoviva, as there was strong agreement among analysts covering to raise estimates.

The chart below shows the evolution of the Zacks Consensus forward EPS estimate over 12 months:

12 month EPS

Revisions to current quarter estimates

The company is expected to earn $2.75 per share for the current quarter, representing a year-over-year change of +205.56%.

In the last 30 days there has been an increased estimate for Innoviva from no negative review. As a result, the Zacks consensus estimate increased by 28.57%.

Revisions to estimates for the current year

For the full year, the earnings estimate of $3.40 per share represents a change of +3.66% compared to the previous year.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for Innoviva. Over the past month, one estimate has risen from no negative revisions, causing the consensus estimate to rise 6.58%.

Favorable ranking of Zacks

The promising estimate revisions helped Innoviva earn a #1 Zacks rank (Strong Buy). The Zacks Ranking is a proven scoring tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Conclusion

Although strong revisions to Innoviva’s estimates have attracted decent investment and pushed the stock up 7.3% over the past four weeks, there may still be some upside potential in the stock. So you can consider adding it to your portfolio right away.

FREE Report: The Metaverse is Exploding! Don’t want to cash out?

Rising gas prices. The war in Ukraine. The American recession. Inflation. It’s no wonder the metaverse is so popular and growing every day. Becoming Spider-Man and battling Darth Vader is infinitely more appealing than spending over $5 a gallon at the pump. And this allure is why the metaverse can provide such massive gains for investors. But do you know where to look? Do you know which metaverse stocks to buy and which to avoid? In a FREE new report from Zacks’ leading stock expert, we reveal how you could profit from the next evolution of the internet. Even though the popularity of the metaverse is spreading like wildfire, investors like you can still get in on the ground floor and cash in. Don’t miss your chance to get your share of this innovative $30 trillion opportunity – FREE.>>Yes, I want to know the best metaverse stocks for 2022>>

Want the latest recommendations from Zacks Investment Research? Today you can download 7 best stocks for the next 30 days. Click to get this free report

Innoviva, Inc. (INVA): Free Inventory Analysis Report

To read this article on Zacks.com, click here.

Zacks Investment Research

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