Pharmaceutical Strength Expected To Continue With Questcor Tuesday

Feb.25.14 | About: Mallinckrodt PLC (MNK)

Questcor Pharmaceuticals Inc. (QCOR) is set to report FQ4 2013 earnings after the market closes on Tuesday, February 25th. Questcor is a biopharmaceutical company which focuses on difficult to treat autoimmune and inflammatory diseases. The company currently markets one product, H.P. Acthar Gel which treats acute exacerbations of multiple sclerosis in adults and can be used for monotherapy for the treatment of infantile spasms in infants and children under 2 years of age. This quarter Wall Street is expecting 54% revenue growth compared to FQ4 last year. Here's what investors are expecting.

The information below is derived from data submitted to the platform by a set of Buy Side and Independent analyst contributors.image

(Click Here to see All Estimates for Questcor)

The current Wall Street consensus expectation is for QCOR to report $1.70 EPS and $248.21M revenue while the current consensus from 20 Buy Side and Independent contributing analysts is $1.73 EPS and $254.06M revenue. This quarter the buy-side as represented by the community is expecting Questcor to beat the Wall Street consensus on both EPS and revenue.

Over the previous 6 quarters the Estimize consensus has been more accurate than Wall Street in forecasting Questcor's EPS and revenue 5 times each. By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non-professional investors, Estimize has created a data set that is up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market's actual expectations. It has been confirmed by an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus.

The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case we are seeing a smaller differential compared to previous quarters.image

The distribution of estimates published by analysts on the platform range from $1.67 to $1.82 EPS and $245.50M to $290.00M in revenues. This quarter we're seeing a narrower distribution of estimates for Questcor on EPS, but a wider range on revenue.

The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A narrower distribution of EPS estimates signaling more agreement in the market, which could mean less volatility post earnings.


Over the past 4 months Wall Street raised its EPS consensus from $1.51 to $1.70 while the Estimize community lifted its expectations from $1.70 to $1.73. Over the same period of time, Wall Street increased its revenue consensus from $241.7M to $248.21M and the Estimize community consensus surged from $245.9M to $254.28M. Timeliness is correlated with accuracy and upward analyst revisions going into a report are often a bullish indicator.image

The analyst with the highest estimate confidence rating this quarter is sriramv who projects $1.72 EPS and $248.95M in revenue. In the Winter 2014 season sriramv is rated as the 87th best analyst and is ranked 120th overall among over 3,900 contributing analysts. Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case sriramv is expecting Questcor to miss the Estimize consensus on both the top and bottom line.

Lately the biotech and pharmaceutical industries have been red hot. This quarter contributing analysts on the platform are expecting that strength to continue with Questcor Pharmaceuticals beating Wall Street expectations on both the top and bottom line.

Disclosure: No positions