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Emergent Biosolutions (EBS) Down 14.7% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Emergent Biosolutions (EBS - Free Report) . Shares have lost about 14.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Emergent Biosolutions due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Emergent Beats on Q3 Earnings, Tapers '20 Sales View
Emergent reported third-quarter 2020 earnings of $2.19 per share, which beat the Zacks Consensus Estimate of $2.05 and also improved from the year-ago quarter’s earnings of $1.24.
Revenues in the reported quarter were also up 24% from the prior-year period to $385.2 million, primarily owing to an increase in CDMO services revenues. However, the top line missed the Zacks Consensus Estimate of $452 million and also declined sequentially due to lower total product sales.
Quarter in Detail
Total product sales declined 21% to $202.2 million from the year-earlier quarter due to decreased sales of smallpox vaccine ACAM2000.
ACAM2000 generated sales of $1 million, significantly lower year over year due to a timing delay that resulted in fewer doses for supply.
Narcan nasal spray added $88.8 million to product sales, reflecting an increase of 18% year over year.
Sales of anthrax vaccines (BioThrax and AV7909) were $73.9 million in the reported quarter, soaring 83% year over year. Other product sales also surged 34% on a year-over-year basis to $38.5 million.
Revenues from contracts and grants decreased 27.2% year over year to $25.9 million.
Contract manufacturing revenues jumped to $157.1 million, reflecting a significant increase from the year-ago quarter’s figure. On the third-quarter conference call, management stated that the upside was on the back of contributions from the contract value related to COVID-19. The most notable one is the company's CDMO partnership with BARDA in support of the U.S. government's Operation Warp Speed program.
The company recorded adjusted EBITDA of $168.1 million in the reported quarter compared with $106.4 million in the year-ago period, up 58%.
2020 Guidance Revised
Emergent lowered its sales outlook for the current year. The company now expects total revenues of $1.52-$1.58 billion, narrowed from the previous forecast of $1.5-$1.6 billion.
Meanwhile, adjusted net income is expected in the band of $375-$405 million compared with the earlier projection of $340-$390 million. Adjusted EBITDA is now anticipated in the range of $575-$615 million, higher than the past estimate of $535-$600 million.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 14.69% due to these changes.
VGM Scores
Currently, Emergent Biosolutions has a great Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Emergent Biosolutions has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Emergent Biosolutions (EBS) Down 14.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Emergent Biosolutions (EBS - Free Report) . Shares have lost about 14.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Emergent Biosolutions due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Emergent Beats on Q3 Earnings, Tapers '20 Sales View
Emergent reported third-quarter 2020 earnings of $2.19 per share, which beat the Zacks Consensus Estimate of $2.05 and also improved from the year-ago quarter’s earnings of $1.24.
Revenues in the reported quarter were also up 24% from the prior-year period to $385.2 million, primarily owing to an increase in CDMO services revenues. However, the top line missed the Zacks Consensus Estimate of $452 million and also declined sequentially due to lower total product sales.
Quarter in Detail
Total product sales declined 21% to $202.2 million from the year-earlier quarter due to decreased sales of smallpox vaccine ACAM2000.
ACAM2000 generated sales of $1 million, significantly lower year over year due to a timing delay that resulted in fewer doses for supply.
Narcan nasal spray added $88.8 million to product sales, reflecting an increase of 18% year over year.
Sales of anthrax vaccines (BioThrax and AV7909) were $73.9 million in the reported quarter, soaring 83% year over year. Other product sales also surged 34% on a year-over-year basis to $38.5 million.
Revenues from contracts and grants decreased 27.2% year over year to $25.9 million.
Contract manufacturing revenues jumped to $157.1 million, reflecting a significant increase from the year-ago quarter’s figure. On the third-quarter conference call, management stated that the upside was on the back of contributions from the contract value related to COVID-19. The most notable one is the company's CDMO partnership with BARDA in support of the U.S. government's Operation Warp Speed program.
The company recorded adjusted EBITDA of $168.1 million in the reported quarter compared with $106.4 million in the year-ago period, up 58%.
2020 Guidance Revised
Emergent lowered its sales outlook for the current year. The company now expects total revenues of $1.52-$1.58 billion, narrowed from the previous forecast of $1.5-$1.6 billion.
Meanwhile, adjusted net income is expected in the band of $375-$405 million compared with the earlier projection of $340-$390 million. Adjusted EBITDA is now anticipated in the range of $575-$615 million, higher than the past estimate of $535-$600 million.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 14.69% due to these changes.
VGM Scores
Currently, Emergent Biosolutions has a great Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Emergent Biosolutions has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.