Aerie Pharmaceuticals (AERI) Q3 Earnings: Will It Beat?

We expect Aerie Pharmaceuticals, Inc. (NASDAQ:AERI) to beat expectations when it reports third-quarter earnings results on Nov 2 after market close. However Aerie’s performance over the last four quarters has been disappointing. The company reported a wider-than-expected loss thrice in the four trailing quarters, with an average negative earnings surprise of 11.73%.

Let’s see how things are shaping up for the company this quarter

Why a Likely Positive Surprise?

Our proven model shows that Aerie is likely to beat on earnings because it has the right combination of the two key ingredients.

Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +8.57%. This is a meaningful indicator of a likely positive surprise. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Zacks Rank #3 (Hold): Note that stocks with a Zacks Rank of #1 (Strong Buy), #2 (Buy) and #3 (Hold) have a significantly higher chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.

The combination of Aerie’s Zacks Rank #3 and an +8.57% ESP makes us confident in looking for a positive surprise in the upcoming release.

What's Driving the Better-than-Expected Results?

Aerie Pharmaceuticals is a development-stage company focused on the development and commercialization of eye disease therapies, including glaucoma and other eye diseases.

Being a development-stage company, Aerie does not have any approved product in its portfolio yet. Investors are, thus, expected to focus on pipeline updates.

The lead candidate at the company is Rhopressa, a once-daily formulation for lowering intraocular pressure (IOP) in patients suffering from open-angle glaucoma and ocular hypertension

Aerie filed a NDA with the FDA for the drug in Sep 2016.

The results of the first two Phase III registration trials for Rhopressa are included in the filing.

Apart from Rhopressa, Aerie is evaluating Roclatan, a once-daily, quadruple-action fixed-dose combination of Rhopressa and Xalatan.

We believe that operating expenses will continue to be higher in the quarter due to increased activities related to the phase III programs for Rhopressa and Roclatan, as well as preparatory activities associated with commercialization efforts..

Other Stocks to Consider

Here are some health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Infinity Pharmaceuticals, Inc. (NASDAQ:INFI) has an Earnings ESP of +5.81% and carries a Zacks Rank #1. It is expected to report its results on Nov 3.

Ariad Pharmaceuticals Inc. (NASDAQ:ARIA) has an Earnings ESP of +5.26% and carries a Zacks Rank #1. It is scheduled to report its results on Nov 1. You can see the complete list of today’s Zacks #1 Rank stocks here

The Earnings ESP for Aldeyra Therapeutics, Inc. (NASDAQ:ALDX) is +2.44% and it carries a Zacks Rank #2. The company is expected to release results on Nov 10.

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