As the earnings season winds down, several pharma, drug and biotech companies, which belong to the broader Medical sector, have already reported their quarterly results. Overall, results of the Medical sector have been mixed.
The latest Earnings Trends report reflects continued strength in the fourth-quarter performance of the Zacks Medical sector so far. The sales and earnings growth of the sector is likely to have improved this time around.
Per the Earnings Trends report, as of Feb 16, 80.4% of the companies in the Medical sector, constituting nearly 91.5% of the sector’s market capitalization, have reported earnings. The proportion of companies that beat on earnings and sales estimates was 71.1%. Earnings increased 18.5% year over year on 12.7% higher revenues.
Overall, fourth-quarter earnings of the Medical sector are expected to rise 25.8% on a 13.9% sales increase, suggesting that the recovery of the Medical sector is likely to have continued till the end of the fourth quarter.
Let's see how things have shaped up for Moderna, Inc. (MRNA - Free Report) , Editas Medicine, Inc. (EDIT - Free Report) , Vir Biotechnology, Inc. (VIR - Free Report) , Emergent BioSolutions Inc. (EBS - Free Report) and Aerie Pharmaceuticals, Inc. in the fourth quarter. These companies will report earnings on Feb 24.
According to the Zacks model, a company needs the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Let’s analyze the performances of the above-mentioned five drug/biotech companies set to report earnings results on Feb 24:
Moderna, Inc.
Moderna received authorization for its COVID-19 vaccine, Spikevax, during the fourth quarter for use in adolescents in several countries. Moreover, the booster or third dose also received FDA approval for emergency use in adults. Strong uptake for Spikevax is likely to have driven the top line in the fourth quarter.
Moderna’s grant revenues in the fourth quarter are likely to have been driven by an award from the Biomedical Advanced Research and Development Authority or BARDA under the agreement to develop its coronavirus vaccine programs.
The company’s surprise history has been mixed so far, with its earnings beating estimates in two of the trailing four quarters while missing the same twice. The average negative surprise is 35.84%. In the last-reported quarter, the company delivered a negative earnings surprise of 14.06%.
Earnings ESP for Moderna is -0.03% and the Zacks Consensus Estimate stands at $9.83. Our previous article showed that Moderna had the favorable combination to beat on earnings in the soon-to-be-reported quarter. However, estimates have changed thereafter and a surprise prediction looks difficult now.
Moderna currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Editas Medicine, Inc.
Editas’ top line mainly comprises of collaboration revenues, and other research and development revenues. With no approved product in its portfolio at the moment, pipeline development remains the key focus for Editas. The company is developing its lead pipeline candidate, EDIT-101, which employs CRISPR gene editing to treat Leber congenital amaurosis type 10 (LCA10) — a rare genetic illness that causes blindness.
The activities related to the development of EDIT-101 and other pipeline candidates are likely to have escalated operating expenses in the to-be-reported quarter.
The company’s earnings surprise history has been mixed so far, with its earnings beating estimates in two of the trailing four quarters and missing the same on the other two occasions, delivering an earnings surprise of 0.83%, on average. In the last-reported quarter, Editas reported an earnings beat of 33.72%.
Editas has an Earnings ESP of 0.00% as the Zacks Consensus Estimate is pegged at a loss of 78 cents per share. Editas has a Zacks Rank #2 (Buy).
Vir Biotechnology, Inc.
Vir’s fourth-quarter results have likely been boosted by sales of its monoclonal antibody, sotrovimab, for the early treatment of COVID-19. The company has a profit-sharing arrangement with GlaxoSmithKline for the sale of sotrovimab and earns collaboration revenues from the same. Additional government purchase contracts for doses of this treatment might have fueled the top line.
The company’s earnings surprise history has been mixed so far, with its earnings beating estimates in two of the trailing four quarters and missing the same in the other two occasions, delivering an earnings surprise of 12.95%, on average. In the last-reported quarter, Vir reported an earnings beat of 373.33%.
The combination of Vir’s Earnings ESP of +32.05% and its Zacks Rank #3 raises the possibility of an earnings beat in the to-be-reported quarter. The Zacks Consensus Estimate for earnings stands at $2.60.
Emergent BioSolutions Inc.
Emergent’s revenues in the last-reported quarter decreased owing to lower sales of anthrax vaccines (BioThrax and AV7909), a trend that most likely continued in the to-be-reported quarter. However, Narcan nasal spray and smallpox vaccine ACAM2000’s sales increased on a yearly basis, a trend that most likely continued in the to-be-reported quarter as well.
The company’s surprise history has been mixed so far, with its earnings beating estimates in two of the trailing four quarters while missing the same twice. The average negative surprise is 26.71%. In the last-reported quarter, the company delivered a negative earnings surprise of 117.73%.
The combination of Emergent’s Earnings ESP of +18.40% and its Zacks Rank #3 raises the possibility of an earnings beat in the to-be-reported quarter. The Zacks Consensus Estimate stands at $3.89.
Aerie Pharmaceuticals, Inc.
Aerie’s ophthalmology drugs, Rhopressa and Rocklatan, are gaining traction slowly and steadily. Continued uptake of Rhopressa and Rocklatan are likely to have driven revenues in the fourth quarter. The activities related to pipeline progress with other ophthalmology candidates as well as other developments are likely to have escalated operating expenses in the to-be-reported quarter as well.
The company’s surprise history has been dismal so far, with its earnings lagging estimates in each of the trailing four quarters. The average negative surprise is 7.22%. In the last-reported quarter, the company delivered a negative earnings surprise of 16.13%.
Earnings ESP for Aerie is +0.49%. This is because the Zacks Consensus Estimate stands at a loss of 68 cents per share. Aerie currently carries a Zacks Rank #4 (Sell).
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
As the earnings season winds down, several pharma, drug and biotech companies, which belong to the broader Medical sector, have already reported their quarterly results. Overall, results of the Medical sector have been mixed.
The latest Earnings Trends report reflects continued strength in the fourth-quarter performance of the Zacks Medical sector so far. The sales and earnings growth of the sector is likely to have improved this time around.
Per the Earnings Trends report, as of Feb 16, 80.4% of the companies in the Medical sector, constituting nearly 91.5% of the sector’s market capitalization, have reported earnings. The proportion of companies that beat on earnings and sales estimates was 71.1%. Earnings increased 18.5% year over year on 12.7% higher revenues.
Overall, fourth-quarter earnings of the Medical sector are expected to rise 25.8% on a 13.9% sales increase, suggesting that the recovery of the Medical sector is likely to have continued till the end of the fourth quarter.
Let's see how things have shaped up for Moderna, Inc. (MRNA - Free Report) , Editas Medicine, Inc. (EDIT - Free Report) , Vir Biotechnology, Inc. (VIR - Free Report) , Emergent BioSolutions Inc. (EBS - Free Report) and Aerie Pharmaceuticals, Inc. in the fourth quarter. These companies will report earnings on Feb 24.
According to the Zacks model, a company needs the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Let’s analyze the performances of the above-mentioned five drug/biotech companies set to report earnings results on Feb 24:
Moderna, Inc.
Moderna received authorization for its COVID-19 vaccine, Spikevax, during the fourth quarter for use in adolescents in several countries. Moreover, the booster or third dose also received FDA approval for emergency use in adults. Strong uptake for Spikevax is likely to have driven the top line in the fourth quarter.
Moderna’s grant revenues in the fourth quarter are likely to have been driven by an award from the Biomedical Advanced Research and Development Authority or BARDA under the agreement to develop its coronavirus vaccine programs.
The company’s surprise history has been mixed so far, with its earnings beating estimates in two of the trailing four quarters while missing the same twice. The average negative surprise is 35.84%. In the last-reported quarter, the company delivered a negative earnings surprise of 14.06%.
Earnings ESP for Moderna is -0.03% and the Zacks Consensus Estimate stands at $9.83. Our previous article showed that Moderna had the favorable combination to beat on earnings in the soon-to-be-reported quarter. However, estimates have changed thereafter and a surprise prediction looks difficult now.
Moderna currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Editas Medicine, Inc.
Editas’ top line mainly comprises of collaboration revenues, and other research and development revenues. With no approved product in its portfolio at the moment, pipeline development remains the key focus for Editas. The company is developing its lead pipeline candidate, EDIT-101, which employs CRISPR gene editing to treat Leber congenital amaurosis type 10 (LCA10) — a rare genetic illness that causes blindness.
The activities related to the development of EDIT-101 and other pipeline candidates are likely to have escalated operating expenses in the to-be-reported quarter.
The company’s earnings surprise history has been mixed so far, with its earnings beating estimates in two of the trailing four quarters and missing the same on the other two occasions, delivering an earnings surprise of 0.83%, on average. In the last-reported quarter, Editas reported an earnings beat of 33.72%.
Editas has an Earnings ESP of 0.00% as the Zacks Consensus Estimate is pegged at a loss of 78 cents per share. Editas has a Zacks Rank #2 (Buy).
Vir Biotechnology, Inc.
Vir’s fourth-quarter results have likely been boosted by sales of its monoclonal antibody, sotrovimab, for the early treatment of COVID-19. The company has a profit-sharing arrangement with GlaxoSmithKline for the sale of sotrovimab and earns collaboration revenues from the same. Additional government purchase contracts for doses of this treatment might have fueled the top line.
The company’s earnings surprise history has been mixed so far, with its earnings beating estimates in two of the trailing four quarters and missing the same in the other two occasions, delivering an earnings surprise of 12.95%, on average. In the last-reported quarter, Vir reported an earnings beat of 373.33%.
The combination of Vir’s Earnings ESP of +32.05% and its Zacks Rank #3 raises the possibility of an earnings beat in the to-be-reported quarter. The Zacks Consensus Estimate for earnings stands at $2.60.
Emergent BioSolutions Inc.
Emergent’s revenues in the last-reported quarter decreased owing to lower sales of anthrax vaccines (BioThrax and AV7909), a trend that most likely continued in the to-be-reported quarter. However, Narcan nasal spray and smallpox vaccine ACAM2000’s sales increased on a yearly basis, a trend that most likely continued in the to-be-reported quarter as well.
The company’s surprise history has been mixed so far, with its earnings beating estimates in two of the trailing four quarters while missing the same twice. The average negative surprise is 26.71%. In the last-reported quarter, the company delivered a negative earnings surprise of 117.73%.
The combination of Emergent’s Earnings ESP of +18.40% and its Zacks Rank #3 raises the possibility of an earnings beat in the to-be-reported quarter. The Zacks Consensus Estimate stands at $3.89.
Aerie Pharmaceuticals, Inc.
Aerie’s ophthalmology drugs, Rhopressa and Rocklatan, are gaining traction slowly and steadily. Continued uptake of Rhopressa and Rocklatan are likely to have driven revenues in the fourth quarter. The activities related to pipeline progress with other ophthalmology candidates as well as other developments are likely to have escalated operating expenses in the to-be-reported quarter as well.
The company’s surprise history has been dismal so far, with its earnings lagging estimates in each of the trailing four quarters. The average negative surprise is 7.22%. In the last-reported quarter, the company delivered a negative earnings surprise of 16.13%.
Earnings ESP for Aerie is +0.49%. This is because the Zacks Consensus Estimate stands at a loss of 68 cents per share. Aerie currently carries a Zacks Rank #4 (Sell).
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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