It's a safe bet that most have not heard of Jazz Pharmaceuticals (NASDAQ:JAZZ), but the company had a bang-up quarter by just about any measure. The market responded, before trading even opened today, by driving share prices up 7.9% at last report. This incredible advance was made possible by some impressive numbers in the quarterly report, and the phrase “beat estimates” will come up quite a bit in the discussion of same.
Beating Estimates All Over the Place
Jazz Pharmaceuticals made beating estimates a habit with its latest set of numbers, and a look at how they turned out should impress potential investors throughout the spectrum. Earnings per share (EPS) beat estimates handily, coming in at $4.31 per share as compared to the original estimate of $4.08. Earnings per share also beat last year's figures as well, bringing in an extra 5.12% over the figures from the same time last year. That the estimated earnings level was that high to begin with is an achievement, but for a stock with a share price running at $147.25 as of this writing, perhaps not that big a surprise.
Revenue was in the same boat, not only posting gains over analyst expectations, but also over last year's figures. The company brought in $600.888 million in revenue, a solid step above expected revenue of $577.58 million, and also 11.75% better than what was seen this time last year.
As for the upcoming year's figures, Jazz Pharmaceuticals took a leap and offered guidance, a phenomenon not commonly seen these days. The company expects full-year EPS to come in between $12.20 and $13, with expected revenue of between $2.32 billion and $2.38 billion.
A Laundry List of Driving Factors
Numbers like those don't just drop out of the clear blue sky, no matter how much CEOs may wish they would. So what produced those numbers? As it turns out, several factors contributed to the gains here.
Back in July, the company brought out Zepzelca, a drug designed to target “relapsed small cell lung cancer,” reports noted. A cancer treatment drug tends to do well because the market for it is highly motivated, and Jazz was looking for Zepzelca to generate significant new growth in the company's oncology department. That wasn't all the company brought out, though, as it also brought out a narcolepsy treatment called Xywav, and hit Europe with Sunosi, a treatment for “excessive daytime sleepiness” connected to either sleep apnea or, again, narcolepsy.
The company has advanced heavily in its research and development (R&D) efforts, and it doesn't stop there. Just a week ago, the company picked up global rights to “FAAH Inhibitor PF-04457845”, which is a massive name for a drug that could be a real winner: a treatment for post-traumatic stress disorder.
Analysts Overwhelmingly Agree
That's a great list of features going into Jazz, but the analyst picture is even better, based on our latest research. “Buy” consensus has led the way for Jazz for the last six months, and in the last month, it's only improved. Six months ago, the company had a clear “buy” impetus, with six “hold” ratings and 13 “buy.” Now, the company has one “sell” rating, one “hold” rating, and 16 “buy”, and that's exactly how it was a month ago.
The price target has also increased steadily, going up from $156.22 a share six months ago to $172.12 today, both of which are still well above the company's current share price, and represents a significant opportunity to buy in.
Diversified, Focused, and Delivering
The results here fairly well speak for themselves, especially when you know what went into those results. Sure, Jazz Pharmaceuticals isn't part of the COVID-19 horse race like other firms are, but it's delivering results on diseases that are issues for many out there. From lung cancer to narcolepsy to even PTSD—and if that actually works out as projected it could be a coup in its own right—Jazz Pharmaceuticals is putting out winners and reaping the rewards accordingly. It would be easy to suggest that the company may be a bit unfocused here, but there's also quite a bit to be said for a diversified portfolio, in both stocks and product lines.
With substantial projected upside still to come, an array of drugs already in play, and an R&D platform that's delivering winners like a train schedule, buying in on Jazz Pharmaceuticals may be a smart move going forward.
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