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Why Is Repligen (RGEN) Down 6.7% Since Last Earnings Report?

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A month has gone by since the last earnings report for Repligen (RGEN - Free Report) . Shares have lost about 6.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Repligen due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Repligen’s Earnings and Sales Surpass Estimates in Q3

Repligen delivered third-quarter 2020 earnings per share of 40 cents, beating the Zacks Consensus Estimate of 28 cents. The bottom line also surpassed the year-ago earnings of 26 cents.

Moreover, total revenues of $94.1 million exceeded the Zacks Consensus Estimate of $86 million. Additionally, the top line improved 35% year over year (34% in constant currency) on strong demand amid COVID and gene therapy programs and Filtration product franchisee performed very well.

Excluding the impact of currency and acquisitions/divestures, Repligen’s revenues grew 31% organically year over year in the third quarter of 2020.

Quarter in Detail

Adjusted gross margin was 58% in the third quarter

In the reported quarter, adjusted research and development expenses were $4.4 million, down 13.7% from the year-ago figure.

Adjusted selling, general and administrative expenses were $23.3 million, surging 24.6% year over year.

Adjusted operating income was $26.9 million, increasing 76.9% year over year.

As of Sep 30, 2020, Repligen had cash and cash equivalents worth $553.3 million compared with $560.4 million on Jun 30, 2020.

2020 Guidance

On the third-quarter conference call, management stated that based on the strong performance of the bioprocessing market including COVID vaccines and therapeutics, Repligen raised its revenue guidance for the full year.

The company now expects total revenues in the range of $348-$352 million for the current year compared with the earlier projection of $332-$340 million, implying organic growth of 23-24%.

Adjusted net income is projected in the $75-$77 million band, indicating an increase from the previous guidance of $66-$69 million. Adjusted operating income is anticipated within $91-$93 million, suggesting a rise from the past view of $81-$84 million.

Adjusted EPS is anticipated within $1.41-$1.45, up from the prior guidance of $1.24-$1.29 for 2020.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 14.2% due to these changes.

VGM Scores

Currently, Repligen 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 D on the value side, putting it in the bottom 40% for this investment strategy.

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

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Repligen has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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