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AVEO (AVEO) Down 19.9% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for AVEO Pharmaceuticals . Shares have lost about 19.9% in that time frame, underperforming the S&P 500.

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

AVEO Pharmaceuticals Q1 Earnings & Revenues Miss Mark

AVEO incurred first-quarter 2019 loss of 6 cents per share, wider than the Zacks Consensus Estimate of a loss of 5 cents but narrower than the year-ago loss of 8 cents.

AVEO’s top line comprises collaboration and licensing revenues plus partnership royalties. Total revenues in the reported quarter were approximately $1.6 million compared with $1 million registered in first-quarter 2018. However, revenues missed the Zacks Consensus Estimate of $2 million.

Operating Expenses

Research & development expenses were up 25.9% year over year to $6.8 million. However, general and administrative expenses decreased 7.7% year over year to $2.4 million.

Cash Guidance

AVEO expects that its present cash resources of $23.5 million along with approximately $24.2 million in additional net funding received to date for the second quarter of 2019 will allow the company to invest in its planned operations through the fourth quarter of 2020.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -47.06% due to these changes.

VGM Scores

Currently, AVEO has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

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

Outlook

AVEO has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

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