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Why Is Puma Biotech (PBYI) Up 36% 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 added about 36% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Puma Biotech due for a pullback? 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.

Puma Biotech’s Earnings and Sales Lag Estimates in Q3

Puma Biotech reported a loss of 79 cents per share in the third quarter of 2020, significantly wider than the Zacks Consensus Estimate of a loss of 33 cents and also the year-ago quarter’s loss of 44 cents.

Total revenues consisted of net product sales of Nerlynx and royalty revenues. In the third quarter, total revenues were $50.8 million comprising $49.3 million of product revenues from Nerlynx and $1.5 million of royalty revenues from licensing partners. Sales too missed the Zacks Consensus Estimate of $53 million. Moreover, the top line declined from the year-ago figure of $56 million on lower Nerlynx sales and no license revenues compared with the year-ago quarter.

Quarter in Detail

Sales of Nerlynx $50.8 million decreased 7.8% year over year due to business disruptions caused by the COVID-19 situation.

Total operating costs in the quarter were $62.9 million, down 11.1% year over year.

Research and development expenses (including stock-based compensation expense) were $23.3 million in the quarter, down 22.3% from the year-ago period. Selling, general and administrative expenses (including stock-based compensation expense) declined 5.7% year over year to $29.6 million.

2020 Outlook

On the third-quarter conference call, management stated that for 2020, it anticipates Nerlynx’s net sales in the range of $196-$198 million, lower than the earlier projection of $200-$210 million.

Nerlynx’s net revenues are expected in the $49-$51 million band for the fourth quarter of 2020.

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 10.17% due to these changes.

VGM Scores

At this time, Puma Biotech has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Puma Biotech has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.


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