Dendreon (NASDAQ:DNDN) is scheduled to release its Q1 2011 earnings report and hold its conference call after the market closes on Monday, May 2, 2011. The consensus analyst revenue and EPS estimates for the quarter are $28.8M and ($0.69), respectively.
Dendreon has failed to meet analysts' bottom line consensus figures for several consecutive quarters and a miss this time around could send the share price into a short-term free-fall, as the highly volatile stock has been on an impressive 17% month-long run following the announcement that its prostate cancer drug, Provenge, was proposed for Medicare coverage by regulators.
Short interest has seen a remarkable 37% increase since the beginning of 2011, as longs have undoubtedly hedged their positions and the ever-present Dendreon detractors have increased their bets against the company in expectation of another earnings miss.
DNDN Short Interest
The company's average analyst one year price target is $55. Of the nearly 20 analysts covering the company, 10 are promoting a "strong buy" rating, while just one has tagged it as a "sell" in recent months. An earnings beat along with a reaffirmation or increase in guidance would certainly put the shorts on their heels and quite possibly initiate a minor short-squeeze, propelling the PPS well beyond its current resistance at $44.50.
I am looking for a slight beat on the bottom line estimates and some positive updates concerning the increase in Provenge's manufacturing capacity and the $350M-$400M full-year revenue projection. If the company misses again, but reaffirms guidance, I plan to add on any substantial pullback, should one occur.
Disclosure: I am long DNDN.