We've heard from Sorrento Therapeutics (NASDAQ:SRNE) before, and usually, things are looking good for the biotechnology industry firm. While it's never been a big player—share prices haven't closed above the $15 price point in the last five years—there have been signs of breakouts approaching. In fact, some of the latest news around Sorrento Therapeutics suggests that this surprisingly stable stock could be looking for some gains.
Sound Numbers Showing Growth
Again, no one would mistake Sorrento Therapeutics for an explosively-upward stock, but it's certainly had its share of quiet successes. Recent reports suggest that Sorrento is on track to beat its current fiscal quarter results. The latest word out of Zacks suggests that consensus earnings for Sorrento should hit in the $19.85 million range. That's great news for several reasons: not only does it handily beat the most pessimistic earnings projections of $8.36 million, but it also beats the year-to-year comparison results by a little over 157%. Those earnings came in at $7.72 million, so clear, upward progress is being displayed.
Full-year sales, meanwhile, look to be in the middle of the current range as well; analysts are looking for full-year sales of $860.84 million, which fits nicely into the expected—and surprisingly massive—range of $99.89 million to $3.01 billion. Current projections for the next fiscal year, meanwhile, look for a range between $753.08 million and $2.01 billion, with most analysts looking for the company to land squarely between those two markers, coming in at $1.36 billion in total sales.
Boil these numbers down to their most elemental form and what you get is good news for investors: continuous and fairly regular growth. No surprise spikes that aren't likely to be sustained, or repeated. No one-time-only affairs. Just smooth quiet growth of the kind that should put the stock in a nicely upward pattern.
Increasingly Bullish Analyst Positions
Meanwhile, the analysts are in full agreement. Sorrento has held a consensus rating of “buy” for at least the last six months now, according to our latest research. The “buy” rating has only gotten stronger in recent weeks, which makes Sorrento well worth a second look.
The analyst pool's consensus on Sorrento has been trending upward for that period. Six months ago, the company had two “buy” ratings to its name, which held into three months ago. A month ago, that swung upward to four “buy” ratings, which is where we are today. It's no small feat to see buying recommendations on a stock double in the space of a few weeks, but Sorrento has done just that. It's worth noting that the increase in “buy” ratings can be traced back to two analysts beginning coverage on the stock: B. Riley and Alliance Global Partners, who led off with “buy” ratings.
The price target, meanwhile, has trended upward to match. Six months ago, the price target was $27 per share. When the “buy” ratings doubled a month ago, so too did the price target increase, going to $28.75 per share. That's where it stands today.
What Lit The Fire Under Sorrento?
So right now, we have several reasons to quietly point to about Sorrento's upward potential. We have an improving analyst picture, and we also have some clear gains in earnings. These aren't blockbuster figures, but we do know that better earnings outcomes generally mean good things for share prices as well. Investors like winners, and Sorrento is winning, albeit quietly.
What's more, the market for Sorrento's products is likewise doing well, which could lend Sorrento a little rising-tide-lifts-all-boats help as well. With Sorrento actively working on therapies for diseases ranging from cancer to autoimmune diseases to even Covid-19, it's got a nice broad product base that's full of treatments for diseases customers will no doubt want treated. Sorrento's subsidiary, Scilex Holding, recently landed Food and Drug Administration approval for expanded efficacy labels for its ZTildo topical pain control system, which allows it to be used while showering, bathing, or even swimming. A minor upgrade in the grand scheme of things, maybe, but an upgrade nonetheless.
With Sorrento in oversold territory as of April 12, reports note, and other reports suggesting the company is currently trading below its 200-day moving average, it might be a good time to get into Sorrento. The company has a solid product line that covers a range of diseases needing treated, and could be poised for a real breakout to come. Better yet, Sorrento's current share price, down around $7.60 as of this writing—makes it sufficiently attractively priced to make a small flier comparatively inexpensive. There's not much downside to Sorrento, and buying in now could poise an investor to get in on some substantial upward mobility.
Featured Article: Cost of equity and a company’s balance sheet7 Bellwether Stocks Signaling a Return to Normal
Bellwether stocks are considered to be leading indicators about the direction of the overall economy, a specific sector, or the broader market. They are predictive stocks in that investors can use the company’s earnings reports to gauge economic strength or weakness.
The traditional definition of bellwether stocks brings to mind established, blue-chip companies. They are the home of mature brands with consumer loyalty. These may be stocks that aren’t associated with exceptional growth; some may be dividend stocks.
But there’s something different about normal this time around. If it’s true (and I think it is) that the old rules no longer apply, investors need to change the way they think about bellwether stocks. Plus, let’s face it, many stocks that we might consider to be bellwether stocks have already had a bit of a vaccine rally. That means that the easy gains are gone.
With that in mind, we’ve put together this special presentation that highlights seven of what may be termed the new bellwether stocks. These are stocks that investors should be paying attention to as the economy continues to reopen.
One quality of many of these stocks is that they are either negative for 2021 or underperforming the broader market. And that means that they are likely to have a strong upside as the economy grows.
View the "7 Bellwether Stocks Signaling a Return to Normal"
Companies Mentioned in This Article
Compare These Stocks
Add These Stocks to My Watchlist