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Why Is Editas (EDIT) Down 17.3% Since Last Earnings Report?

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A month has gone by since the last earnings report for Editas Medicine (EDIT - Free Report) . Shares have lost about 17.3% in that time frame, underperforming the S&P 500.

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

Editas' Beats on Q2 Earnings Estimates, Revenues Rise Y/Y

Editas incurred a loss of 43 cents per share in the second quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of 80 cents and also the year-ago loss of 69 cents.

Collaboration, and other research and development revenues comprising the company’s top line came in at $10.7 million, substantially up from the year-ago quarter’s $2.3 million. The top line also comprehensively beat the Zacks Consensus Estimate of $6 million.

Editas has no approved product in its portfolio at the moment. The company generates collaboration revenues, and other research and development revenues.

Quarter in Detail

Research and development expenses were $28 million, up 18.6% from the year-ago figure due to increased fees of licensing and sublicensing activities, and costs borne for expanding the development organization and facilities.

General and administrative expenses dipped 2.1% to $14.1 million owing to lower professional service expenses and patent related fees.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 17.95% due to these changes.

VGM Scores

At this time, Editas has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

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

Outlook

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


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