IDEAYA Biosciences, Inc. (IDYA) Expected to Beat Earnings Estimates: Is It Worth Buying?

When IDEAYA Biosciences, Inc. (IDYA) will report earnings for the quarter ended June 2022, Wall Street expects year-over-year earnings to decline on lower revenues. While this widely known consensus outlook is important in assessing a company’s earnings picture, the most important factor that can impact a company’s near-term share price is how actual results compare to estimates.

The earnings report could help the stock climb higher if these key numbers are better than expected. On the other hand, if they miss, the stock could fall.

While the sustainability of the immediate price movement and future earnings expectations will largely depend on management’s discussion of business conditions during the earnings call, it is worth limiting the likelihood of a positive EPS surprise.

Zacks Consensus Estimate

The company is expected to report quarterly loss of $0.57 per share in the upcoming report, representing a year-over-year change of -72.7%.

Revenue is expected to be $8 million, down 8.7% from the same quarter last year.

Estimate the trend of change

The consensus EPS estimate for the quarter has not changed over the last 30 days. This broadly reflects how analysts covering the data have collectively re-evaluated their initial estimates during this period.

Investors should note that the direction of each analyst’s estimate revisions will not always be reflected in the aggregate change.

Whisper about earnings

Revisions to estimates prior to a company’s earnings release provide an indication of business conditions in the period in which the earnings are expected to be released. This insight is at the heart of our proprietary surprise prediction model, the Zacks Earnings ESP.

The Zacks Earnings ESP compares the Most Accurate Estimates to the Zacks Consensus Estimates for the quarter; The Most Accurate Estimate is a newer revision of the Zacks Consensus EPS Estimate. The idea is that analysts reviewing their estimates just before an earnings release have the latest information that could potentially be more accurate than what they and other consensus participants had previously predicted.

Thus, a positive or negative ESP reading theoretically indicates the likely deviation of actual earnings from consensus estimates. However, the predictive power of the model is only significant for positive ESP readings.

A positive Earnings ESP is a strong predictor of an earnings beat, especially when paired with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks in this combination deliver a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of its Earnings ESP.

Please note that a negative earnings ESP reading does not mean a loss of earnings. Our research shows that it is difficult to predict earnings growth with any degree of confidence for stocks with negative ESP readings and/or a Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How the numbers stacked up for IDEAYA Biosciences, Inc.

In the case of IDEAYA Biosciences, Inc. The Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting analysts have recently become optimistic about the company’s earnings prospects. This translated into an ESP of +27.56%.

On the other hand, the stock currently has a Zacks Rank of #3.

Therefore, this combination indicates that IDEAYA Biosciences, Inc. will most likely beat consensus EPS estimates.

Does the history of surprising results have any clue?

When calculating future earnings estimates, analysts often consider how well a company has been able to match consensus estimates in the past. So it’s worth taking a look at the surprise history to gauge its impact on the upcoming issue.

In the last quarter, IDAYA Biosciences, Inc. was expected to be will report a loss of $0.41 per share when in fact it generated a loss of $0.36, representing a surprise of +12.20%.

Over the last four quarters, the company has surpassed consensus EPS estimates only once.

Bottom line

Improving or lacking earnings may not be the only basis for a stock’s value rising or falling. Many stocks lose value despite good earnings because of other factors that disappoint investors. Similarly, unforeseen catalysts help many stocks gain despite losing profits.

That said, betting on stocks that are expected to exceed earnings expectations increases your chances of success. Therefore, it is worth checking the company’s Earnings Rank and Zacks Rank before their quarterly release. Use our Earnings ESP filter to find the best stocks to buy or sell before they report.

IDEAYA Biosciences, Inc. It seems a compelling candidate to beat earnings. However, investors should also pay attention to other factors if they want to bet on or stay away from these stocks ahead of an earnings release.

Expected results of an industry player

Another soon-to-be stock in the Zacks Medical – Biomedical and Genetics industry, ANI Pharmaceuticals (ANIP) is expected to post earnings of $0.12 per share for the quarter ended June 2022. These estimates indicate a year-over-year change of -82.1%. Revenue for the quarter is expected to be $69.75 million, an increase of 43.4% compared to the same quarter last year.

Consensus EPS estimates for ANI have been revised upwards by 16% over the last 30 days to current levels. However, the higher most accurate estimate gave an earnings ESP of 13.04%.

Combined with the Zacks Rank of 2 (Buy), this Earnings ESP indicates that ANI is likely to outperform the consensus EPS estimate. The company has topped consensus EPS estimates twice over the last four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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