What's in the Cards for Zynerba (ZYNE) This Earnings Season?

In the absence of an approved product, investors’ focus will be on the progress of Zynerba Pharmaceuticals, Inc.’s ZYNE lead pipeline candidate when the company reports first-quarter 2019 results.

The company’s earnings beat the Zacks Consensus Estimate in two of the last four quarters and missed the same twice with the average positive surprise being 2.11%.

Shares of Zynerba have surged 289.2% so far this year compared with the industry‘s rise of 6.6%.

In the last reported quarter, Zynerba reported a positive earnings surprise of 34.33%.

Let’s see how things are shaping up for this announcement.

Things to Watch Out For

Investors will likely focus on the progress of the company’s lead pipeline candidate, Zygel, on the first-quarter earnings call.

Zynerba is developing Zygel multiple neuropsychiatric indications including Fragile X  syndrome (“FXS”), and developmental and epileptic encephalopathies.

In March, the company initiated a phase II study to evaluate Zygel in autism spectrum disorder in pediatric patients.

Meanwhile, the company is looking to get an approval for Zygel for treating FXS. A pivotal study is evaluating the candidate for treating patients with FXS aged 3 to 17 years. Previously presented data from the study showed improvement in core emotional and behavioral symptoms of statistical significance. Zynerba expects to report top-line data in the second half of this year and submit a new drug application next year.

These developments are likely to drive operating expenses higher in the soon-to-be reported quarter. The company has enough cash to fund its operations beyond 2020.

Zynerba is focused on developing cannabinoid therapies for rare neuropsychiatric disorders.

Earnings Whispers

Our proven model does not conclusively show that Zynerba is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. But that is not the case here, as you will see below.

Earnings ESP: Zynerba’s Earnings ESP is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at a loss of 46 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Although Zynerba’s Zacks Rank #2 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Zynerba Pharmaceuticals, Inc. Price and Consensus