Foghorn Therapeutics Inc. (FHTX) stock experienced a significant surge in the last trading session, closing at $9.72, representing a 9.5% rally. This surge was accompanied by notable volume, indicating increased investor interest. Over the past four weeks, the stock has gained a substantial 43.2%. This upward momentum can be attributed to the company’s recent announcement of strong financial results for the second quarter of 2024. Furthermore, ongoing studies on Foghorn’s pipeline candidates for treating various oncology indications are showing promising progress. This positive news flow likely played a key role in driving the recent share price rally.
While the company is expected to report a quarterly loss of $0.41 per share in its upcoming report, representing a year-over-year change of -20.6%, it’s important to note that revenue is expected to be $7.01 million, a decline of 59.9% from the year-ago quarter. While earnings and revenue growth expectations provide insights into the potential strength of a stock, research indicates that trends in earnings estimate revisions are strongly correlated with near-term stock price movements. In the case of Foghorn Therapeutics, the consensus EPS estimate for the current quarter has been revised 7% lower over the past 30 days. This negative trend in earnings estimate revisions doesn’t usually translate into price appreciation.
Therefore, investors should closely monitor FHTX going forward to determine if this recent jump can translate into sustained strength. The stock currently holds a Zacks Rank #2 (Buy). Foghorn Therapeutics belongs to the Zacks Medical – Drugs industry.
It’s worth noting that another company in the same industry, United Therapeutics (UTHR), closed the last trading session down 0.6% at $339.12. However, UTHR has returned 5.6% over the past month. The consensus EPS estimate for United Therapeutics’ upcoming report has been revised +0.1% over the past month to $6.33, representing a +17.7% change from the previous year. United Therapeutics currently has a Zacks Rank of #3 (Hold).
While Foghorn Therapeutics’ recent performance is promising, investors should remain aware of the evolving analyst sentiment and keep a watchful eye on the company’s future performance to determine if the current rally can be sustained.
