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Why Is Puma Biotech (PBYI) Down 7.2% Since Last Earnings Report?

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It has been about a month since the last earnings report for Puma Biotech (PBYI - Free Report) . Shares have lost about 7.2% in that time frame, underperforming the S&P 500.

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

Puma Biotech’s Earnings and Revenues Beat Estimates in Q2

Puma Biotech delivered earnings of 8 cents per share in the second quarter of 2020, rebounding from the year-ago quarter’s loss of 97. The Zacks Consensus Estimate was of a loss of 26 cents.

The bottom line includes an impact of stock-based compensation expense. Excluding the same, adjusted earnings per share were 36 cents versus a loss of 57 cents in the year-ago quarter.

Total revenues consisted of net product sales of Nerlynx, license and royalty revenues. In the second quarter, the top line was $70.6 million, comprising $48.8 million of product revenues from Nerlynx, $1.1 million of royalty revenues from licensing partners and license revenues worth $20.7 million. Sales comprehensively beat the Zacks Consensus Estimate of $56 million. Moreover, sales improved from the year-ago figure of $54 million on higher license revenues.

Quarter in Detail

Sales of Nerlynx decreased 9.3% year over year but increased slightly on a sequential basis. Sales in the quarter were hurt by business disruptions due to the COVID-19 situation as well as a significant inventory drawdown by specialty pharmacies in the quarter.

Total operating costs in the quarter were $63.5 million, down 20.3% year over year. Research and development expenses (including stock-based compensation expense) were $24.7 million in the quarter, down 33.1% from the year-ago period. Selling, general and administrative expenses (including stock-based compensation expense) declined 12.2% year over year to $29.4 million.

2020 Outlook

On the second-quarter conference call, management stated that for the full year, it anticipates Nerlynx net sales in the range of $200-$210 million. Additionally, Nerlynx net revenues are expected in the $48 - $50 million band for the third quarter of 2020.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -188.24% due to these changes.

VGM Scores

At this time, Puma Biotech has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. 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 indicates a downward shift. Notably, Puma Biotech has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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