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Thursday Morning’s Market Insights: Transenterix Inc (TRXC), Sarepta Therapeutics Inc (SRPT), QUALCOMM, Inc. (QCOM), Under Armour Inc (UA)

By Shira Gonen

Transenterix Inc (NYSEMKT:TRXC) is down a whopping 65% in pre-market trading after the FDA determined that its SurgiBot system does not adequately meet criteria for approval. The company had to prove that SurgiBot performed functions similar to devices already on the market, which the FDA claimed was insufficient.

Following the announcement, company CEO Todd M. Pope stated, “The FDA’s decision is extremely disappointing. We are in the process of reviewing all aspects of the FDA’s communication.” He continued, “We will work to complete this review, and will provide an update on the regulatory strategy for the SurgiBot System together with our first quarter 2016 financial and operating results during our quarterly conference call on May 10, 2016.”

According to TipRanks, 2 hedge fund managers have sold out of the company last quarter and one reduced his holdings in the company by 6.05%.

Sarepta Therapeutics Inc (NASDAQ:SRPT) is down 31% in pre-market trading after the FDA posted a negative clinical review of the company’s DMD drug, eteplirsen. An outside advisory panel will be conducted on April 25, but many fear the drug has a low likelihood of approval due to the summary. The FDA issued the following statement in the review: “Although FDA is prepared to be flexible with respect to a devastating illness with no treatment options, we cannot approve drugs for which substantial evidence of effectiveness has not been established,” On Monday, Sarepta will have the opportunity for a rebuttal regarding the claims, with DMD patients and families expected to testify on the company’s behalf.

According to TipRanks, out of all the analysts who have rated the company in the past 3 months, 43% gave a Buy rating, 14% gave a Sell rating, and 43% remain on the sidelines. The average 12-month price target for the stock is $35.20, marking a 79% upside from where shares last closed.

QUALCOMM, Inc. (NASDAQ:QCOM) is down close to 2% following its Q2 earnings release yesterday after market close. The company reported $5.55 billion in revenue and earnings of $1.04 per share, compared to consensus estimates of $4.34 billion and $0.96, respectively. Despite better than expected results, investors were more focused on its EPS guidance for Q3 of between $0.90 and $1, compared to consensus estimates of $1.02. In light of this minor mishap, management expressed a positive tone regarding the company’s success in Samsung phones, a resolved dispute with LG, and the success of its licensing business.

Following earnings, Cowen and Co. analyst Timothy Arcuri weighed in on the stock with an Outperform rating and $60 price target. He stated, “In QTL, the LG dispute is now resolved and fears around a major collapse in the royalty rate are unfounded, but collections in China remain a big challenge even despite new licensing agreements while the overall market continues to slow with QCOM cutting overall market growth now to low singles Y/Y. In QCT, the pending share loss at AAPL is being more clearly acknowledged w/QCOM… This is a major positive in our view as it focuses on what it does well – bring differentiated technology to mid and high tiers that others cannot replicate.”

According to TipRanks, out of all the analysts who have rated the company in the past 3 months, 60% gave a Buy rating while 40% remain on the sidelines. The average 12-month price target for the stock is $59.50, marking a 14% upside from where shares last closed.

Under Armour Inc (NYSE:UA) is up 4% in pre-market trading after the company released earnings 1Q:16 earnings. The company reported better than expected revenues of $1.05 million, compared to consensus estimates of $1.04 billion and earnings of $0.04 per share, compared to estimates of $0.02 per share. One factor contributing to stellar earnings was April 7 Class C stock dividend, similar to a two for one-stock split. The company reported a 20% increase in apparel revenue and a 64% increase in footwear revenue, largely due to the Steph Curry basketball shoe. Moreover, the company increased its FY revenue guidance to $5 billion compared to its previous forecast of $4.95 billion.

Yesterday, analyst Jonathan Komp of Robert W. Baird weighed in on the stock with a Buy rating and no price target. He stated, “We anticipate healthy Q1 results and remain constructive with respect to the 2016 outlook based on signs of strong brand momentum, several emerging product/marketing drivers, and potentially conservative 2H16 assumptions. All in, we believe many of UA’s core growth drivers remain in place and we expect management to confidently reiterate as such.”

According to TipRanks, out of all the analysts who have rated the company in the past 3 months, 67% gave a Buy rating, 6% gave a Sell rating, and 27% remain on the sidelines. The average 12-month price target for the stock is $49.1, marking a 13% upside from where shares last closed.