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Why Is Editas (EDIT) Down 9.6% 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 9.6% 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 Misses on Q4 Earnings, Beats on Revenues

Editasincurred a loss of $1 per share in the fourth quarter of 2020, which was wider than the Zacks Consensus Estimate of a loss of 82 cents per share and also the year-ago quarter’s loss of 74 cents.

Collaboration, and other research and development revenues comprising the company’s top line came in at $11.4 million in the reported quarter, down 7.3% year over year. However, the top line beat the Zacks Consensus Estimate of $7 million.

The decline in revenueswas owing to revenues recognized under the Allergan collaboration recorded in the fourth quarter of 2019, but the same did not happen for the three months ended Dec 31, 2020 as a result of terminating the Allergan collaboration.

Quarter in Detail

In the fourth quarter, research and development expenses were $61.5 million, up 76.7% from the year-ago figure due to increased expenses related to the development of EDIT-101.

General and administrative expenses decreased 6.5% to $15.8 million owing to lower performance bonus expenses due to employee turnover in the reported quarter.

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 8.58% due to these changes.

VGM Scores

At this time, Editas has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. 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. 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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