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Acadia (ACAD) Down 10.8% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Acadia Pharmaceuticals (ACAD - Free Report) . Shares have lost about 10.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Acadia 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 drivers.

ACADIA Q2 Earnings Beat, Revenues Miss Estimates

ACADIA reported second-quarter 2021 loss of 27 cents per share, narrower than the Zacks Consensus Estimate of a loss of 30 cents. In the year-ago quarter, the company reported a loss of 27 cents.

Total revenues, comprising net sales of ACADIA's only marketed drug, Nuplazid, increased 5% year over year to $115.2 million in the second quarter, driven by sequential and year-over-year volume growth. However, the top line missed the Zacks Consensus Estimate of $127 million.

Quarter in Detail

Research and development (R&D) expenses were $56.9 million in the quarter, down 11.5% from the year-ago period on decreased development costs related to Nuplazid label expansion studies.

Selling, general and administrative (SG&A) expenses rose 14.8% year over year to $96.8 million due to higher costs associated with advertising and promotion, and stock-based compensation expenses.

As of Jun 30, 2021, ACADIA had cash, cash equivalents and investments worth $556.9 million compared with $577.8 million as of Mar 31, 2021.

2021 Guidance

Owing to the continuing negative impact of the COVID-19 pandemic, ACADIA lowered its financial guidance for 2021. Nuplazid net sales are now expected in the range of $480-$515 million for 2021, compared with the earlier projection of $510-$550 million. The Zacks Consensus Estimate for the metric stands at $524.3 million.

The company also lowered its expectation for R&D expenses to the range of $250-$270 million band, which was earlier expected to be within $280-$300 million. SG&A expense guidance for the full year is expected to be in the range of $385-$415 million, unchanged from the previous guidance.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

Currently, Acadia has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Acadia has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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