We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Ligand (LGND) Q4 Earnings: Will the Stock Pull a Surprise?
Read MoreHide Full Article
Ligand Pharmaceuticals Incorporated (LGND - Free Report) is scheduled to report fourth-quarter 2016 results on Feb 23, after the market closes. Ligand’s earnings history is mixed as it missed expectations in two of the last four quarters. Overall, the company had an average negative surprise of 5.01% in the trailing four quarters.
However, Ligand’s shares outperformed the Zacks classified Medical-Biomedical and Genetics industry. Shares of the company gained 15.5% in the last one year, while the industry recorded an increase of 5.6%.
In the last reported quarter, Ligand posted a negative earnings surprise of 66.67%. Let’s see how things are shaping up for this announcement.
Ligand Pharmaceuticals Incorporated Price and EPS Surprise
Ligand generates revenues through royalties, license and milestone payments, as well as the sale of Captisol material. The company's Captisol formulation technology has resulted in its partnerships with several leading healthcare companies like Novartis AG (NVS - Free Report) and Amgen that provide it with funds in the form of milestone and royalty payments. Royalties depend on the sales of its two key partnered assets – Kyprolis and Promacta. Sales of the Captisol material, on the other hand, are contingent upon the timing of its purchase for clinical and commercial use.
For the fourth quarter, Ligand expects earnings in the range of $1.29–$1.36 per share on revenues of $39–$43 million (including approximately royalty revenues of $19 million). The quarterly revenue pattern at Ligand over the past couple of years shows that the fourth quarter is usually stronger than the rest due to royalties and ordering patterns of Captisol for commercial use.
Fourth-quarter royalties are expected to be driven by Promacta and Kyprolis sales. The recently launched Evomela should add to sales.
However, Captisol sales are expected to decline due to the timing of certain regulatory and clinical events.
Operating expenses vary on a quarterly basis depending mainly on the timing of costs associated with internal programs and business development activities.
We expect investor focus to remain on updates on the company’s partnerships and major pipeline assets at the fourth-quarter conference call.
Earnings Whispers
Our proven model does not conclusively show that Ligand is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as elaborated below.
Zacks ESP: The Earnings ESP for Ligand is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.02. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Liganda has a Zacks Rank #2. Though the company’s favorable Zacks Rank increases the predictive power of ESP, its 0.00% Earnings ESP makes surprise prediction difficult.
Note that we caution against stocks with Zacks Rank #4 or 5 (Sell-rated) going into an earnings announcement, especially when the company is seeing a negative estimate revision.
Stocks That Warrant a Look
Here are a couple of health care stocks that you may want to consider, as our model shows that this have the right combination of elements to post an earnings beat this quarter.
Exact Sciences Corporation (EXAS - Free Report) has an Earnings ESP of +5% and a Zacks Rank #2. The company is expected to release results on Feb 21.
Just Released – Driverless Cars: Your Roadmap to Mega-Profits Today
In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Ligand (LGND) Q4 Earnings: Will the Stock Pull a Surprise?
Ligand Pharmaceuticals Incorporated (LGND - Free Report) is scheduled to report fourth-quarter 2016 results on Feb 23, after the market closes. Ligand’s earnings history is mixed as it missed expectations in two of the last four quarters. Overall, the company had an average negative surprise of 5.01% in the trailing four quarters.
However, Ligand’s shares outperformed the Zacks classified Medical-Biomedical and Genetics industry. Shares of the company gained 15.5% in the last one year, while the industry recorded an increase of 5.6%.
In the last reported quarter, Ligand posted a negative earnings surprise of 66.67%. Let’s see how things are shaping up for this announcement.
Ligand Pharmaceuticals Incorporated Price and EPS Surprise
Ligand Pharmaceuticals Incorporated Price and EPS Surprise | Ligand Pharmaceuticals Incorporated Quote
Factors at Play
Ligand generates revenues through royalties, license and milestone payments, as well as the sale of Captisol material. The company's Captisol formulation technology has resulted in its partnerships with several leading healthcare companies like Novartis AG (NVS - Free Report) and Amgen that provide it with funds in the form of milestone and royalty payments. Royalties depend on the sales of its two key partnered assets – Kyprolis and Promacta. Sales of the Captisol material, on the other hand, are contingent upon the timing of its purchase for clinical and commercial use.
For the fourth quarter, Ligand expects earnings in the range of $1.29–$1.36 per share on revenues of $39–$43 million (including approximately royalty revenues of $19 million). The quarterly revenue pattern at Ligand over the past couple of years shows that the fourth quarter is usually stronger than the rest due to royalties and ordering patterns of Captisol for commercial use.
Fourth-quarter royalties are expected to be driven by Promacta and Kyprolis sales. The recently launched Evomela should add to sales.
However, Captisol sales are expected to decline due to the timing of certain regulatory and clinical events.
Operating expenses vary on a quarterly basis depending mainly on the timing of costs associated with internal programs and business development activities.
We expect investor focus to remain on updates on the company’s partnerships and major pipeline assets at the fourth-quarter conference call.
Earnings Whispers
Our proven model does not conclusively show that Ligand is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as elaborated below.
Zacks ESP: The Earnings ESP for Ligand is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.02. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Liganda has a Zacks Rank #2. Though the company’s favorable Zacks Rank increases the predictive power of ESP, its 0.00% Earnings ESP makes surprise prediction difficult.
Note that we caution against stocks with Zacks Rank #4 or 5 (Sell-rated) going into an earnings announcement, especially when the company is seeing a negative estimate revision.
Stocks That Warrant a Look
Here are a couple of health care stocks that you may want to consider, as our model shows that this have the right combination of elements to post an earnings beat this quarter.
Pacira Pharmaceuticals, Inc. (PCRX - Free Report) is expected to release results on Feb 23. The company has an Earnings ESP of +20% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Exact Sciences Corporation (EXAS - Free Report) has an Earnings ESP of +5% and a Zacks Rank #2. The company is expected to release results on Feb 21.
Just Released – Driverless Cars: Your Roadmap to Mega-Profits Today
In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>