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Zai Lab Limited (ZLAB) Moves 21.5% Higher: Will This Strength Last?

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Zai Lab Limited Unsponsored ADR (ZLAB - Free Report) shares soared 21.5% in the last trading session to close at $29.54. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 32.7% loss over the past four weeks.

The sudden rise in stock price can be attributed to Zai Lab meeting the requirements of Holding Foreign Companies Accountable Act (HFCAA). Per management, the possible risk of delisting Chinese companies in the United States does not apply to the company.

This company is expected to post quarterly loss of $0.33 per share in its upcoming report, which represents a year-over-year change of +40%. Revenues are expected to be $117.94 million, up 35.3% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Zai Lab Limited, the consensus EPS estimate for the quarter has been revised 28% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on ZLAB 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 >>>>

Zai Lab Limited is part of the Zacks Medical - Biomedical and Genetics industry. BioNTech SE Sponsored ADR (BNTX - Free Report) , another stock in the same industry, closed the last trading session 3.7% higher at $96.52. BNTX has returned -4.5% in the past month.

For BioNTech, the consensus EPS estimate for the upcoming report has changed +13.8% over the past month to -$2.33. This represents a change of -64.1% from what the company reported a year ago. BioNTech currently has a Zacks Rank of #3 (Hold).


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