Journey Medical (DERM) Soars 7.3%: Is Further Upside Left in the Stock?

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Journey Medical Corporation (DERM) shares ended the last trading session 7.3% higher at $6.17. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 8.6% loss over the past four weeks.

The FDA is slated to communicate its decision regarding Journey Medical’s regulatory filing for DFD-29, for the treatment of inflammatory lesions and erythema (redness) of rosacea in adults, today. The stock price rally is likely in anticipation of a favorable outcome. Subject to approval, DFD-29 could become the only oral treatment targeting both inflammatory lesions and redness in rosacea, setting it apart as a potential top treatment option for millions of rosacea patients.

This company is expected to post quarterly loss of $0.17 per share in its upcoming report, which represents a year-over-year change of -121.3%. Revenues are expected to be $14.36 million, down 58.4% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Journey Medical, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on DERM going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Journey Medical is a member of the Zacks Medical - Drugs industry. One other stock in the same industry, Heron Therapeutics (HRTX), finished the last trading session 2.3% higher at $1.78. HRTX has returned -15.9% over the past month.

Heron Therapeutics' consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.03. Compared to the company's year-ago EPS, this represents a change of +82.4%. Heron Therapeutics currently boasts a Zacks Rank of #3 (Hold).

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