Over the past three months, the Zacks Consensus Estimate for the company has increased 7.4%. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >.Įarnings Estimate Revisions for Fate Therapeuticsįor the fiscal year ending December 2023, this clinical-stage biotech company that develops stem cell treatments is expected to earn -$2 per share, which is a change of 31.3% from the year-ago reported number.Īnalysts have been steadily raising their estimates for Fate Therapeutics. The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. And investors' appreciation of this improving business trend should push the stock higher. Their transaction of large amounts of shares then leads to price movement for the stock.įor Fate Therapeutics, rising earnings estimates and the consequent rating upgrade fundamentally mean an improvement in the company's underlying business. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. The influence of institutional investors has a partial contribution to this relationship, as these big professionals use earnings and earnings estimates to calculate the fair value of a company's shares. The change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. Most Powerful Force Impacting Stock Prices Therefore, the Zacks rating upgrade for Fate Therapeutics basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price. These are mostly driven by subjective factors that are hard to see and measure in real time. The power of a changing earnings picture in determining near-term stock price movements makes the Zacks rating system highly useful for individual investors, since it can be difficult to make decisions based on rating upgrades by Wall Street analysts. ![]() ![]() The Zacks Consensus Estimate - the consensus of EPS estimates from the sell-side analysts covering the stock - for the current and following years is tracked by the system. The sole determinant of the Zacks rating is a company's changing earnings picture. This rating change essentially reflects an upward trend in earnings estimates - one of the most powerful forces impacting stock prices. Fate Therapeutics (FATE) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy).
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