What happened

Shares of biotech company Repligen (RGEN -1.51%) are up an impressive 10.1% as of 11:15 a.m. ET Wednesday, according to data from S&P Global Market Intelligence. The rally is in response to the release of quarterly sales and earnings figures that both topped analysts' expectations.

So what

For the three-month stretch ending in March, Repligen Corporation turned record-breaking revenue of $206.4 million into operating earnings of $0.92 per share. Organic revenue was up 44% year over year, while profits improved 35% compared to the year-ago operating bottom line of $0.68 per share. Analysts were only calling for sales of $185.5 million and earnings of $0.72 per share.

Businessman plotting a rising stock chart.

Image source: Getty Images.

Strength from its gene therapy, filtration, and chromatography arms accounts for most of that growth, although COVID-related revenue still makes up roughly one-fourth of the company's business...a business Repligen's management knows is slowing. Revenue guidance for the full year was dialed back from a range of $800 million to $830 million to a range of only $770 million to $800 million. Income guidance was similarly adjusted, with Repligen Corporation now looking for a 2022 operating bottom line of between $3.07 and $3.15 per share. The analyst community had been modeling an average of $3.25.

All of those numbers, however, are still markedly better than last year's.

Now what

On the surface, the contracted guidance makes the glass seem half empty rather than half full. Yet, investors are clearly celebrating the first-quarter results and the outlook for the remainder of the year. What gives?

The bulk of today's strength can be attributed to the idea that the market was quietly, subconsciously planning for a much weaker report. The stock's price had been more than cut in half between September's high and Tuesday's close, when it reached a new 52-week low. Wednesday's report suggests much of that worry wasn't merited.

More to the point, while today's surge may be a tough move to follow, it could be interpreted as a sign that this biotech stock's sell-off is done and a new bullish paradigm is taking shape. In this vein, the consensus price target for Repligen shares still stands at $272.63, up more than 70% from today's sharply elevated price.