Questcor Pharmaceuticals (QCOR) had fallen some 40% over the last month before today's rally on alleged off-label marketing of its flagship drug, Acthar in a report by Citron Research. However, it seems every other analyst firm has come to a different conclusion about the drug and the company's prospects, and now might be a great time to get this fast growing biotech stock at a discounted price.
Recent positive catalysts for QCOR.
- Suntrust upped the shares to a buy today. The firm cited that revenue from its nephrotic syndrome treatment is running far better than expected.
- The company reported Q2 earnings of 69 cents a share on July 24th, 6 cents a share better than estimates.
- Piper Jaffray upped its price target on QCOR to $67 to $60 after second quarter results.
- ThinkEquity reiterated its "Buy" rating and its $58 price target on the stock
Six additional reasons QCOR has significant upside from at $38 a share:
- The ten analysts have a median price target of $60 on QCOR. Price targets range from $51.50 to $67 a share.
- The stock has a five year projected PEG of just .35 and revenue is expected to increase by more than 100% in FY2012.
- The company has net cash on its balance sheet and sells for just 10 times forward earnings, a discount to its five year average (17.3)
- Earnings are exploding. The company made $1.27 a share in FY2011, and analysts see it earning $2.79 a share in FY2012 and $3.78 in FY2013.
- Consensus earnings estimates for both FY2012 and FY2013 have both improved around 12% over the past three months.
- The stock hit and bounced off the same technical support level as six months ago when a similar report caused a significant selloff (See Chart)
Disclosure: I am long QCOR.