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Why Is OPKO Health (OPK) Down 5.6% Since Last Earnings Report?

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A month has gone by since the last earnings report for OPKO Health (OPK - Free Report) . Shares have lost about 5.6% in that time frame, underperforming the S&P 500.

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

OPKO Health Q1 Earnings Match Estimates, Revenues Top

OPKO Health, Inc. reported first-quarter 2021 adjusted earnings per share of 5 cents per share, which met the Zacks Consensus Estimate. Notably, the company had reported a loss of 9 cents in the prior-year quarter.

Revenue Details

First-quarter revenues of the company were $545.2 million, which surpassed the Zacks Consensus Estimate by 8.4%. The top line also improved 157.8% on a year-over-year basis.

Segmental Revenues in Q1

Revenues from Services amounted to $507 million in the reported quarter, up 196.8% year over year driven by COVID-19 testing volume. However, decline in revenues in the company’s bases testing business, which represents the negative impact of the COVID-19 pandemic, partially offset the upside.

Revenues from Products rose 9% to $33.9 million owing to higher sales in OPKO Chile and FinTech. However, lower sales in RAYALDEE partially offset the upside.

Revenues from Transfer of intellectual property totaled $4.3 million, down 55.2% year over year, due to a decline in the amortization of payments received from Pfizer associated with somatrogon.

Per management, total RAYALDEE prescriptions declined 32.8% year over year in the first quarter. During the quarter under review, the company witnessed a decline in sales of RAYALDEE due to the impact of the pandemic.

Margin Analysis

Gross profit in the reported quarter was $181.7 million, up 155.2% from the prior-year quarter. Gross margin was 33.3% of net revenues, down 40 basis points (bps) year over year.

Selling, general and administrative expenses totaled $112.3 million, up 47.6% year over year. Research and development expenses amounted to $19.3 million, down 11.5% year over year.

Operating income in the first quarter was $38.5 million, against the year-ago quarter’s loss of $40.7 million.

Financial Update

The company exited the first quarter with cash, cash equivalents and marketable securities of $89.5 million, compared with $72.2 million on a sequential basis.

Guidance

In the quarter under review, OPKO Health refrained from issuing any guidance.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -54.55% due to these changes.

VGM Scores

Currently, OPKO Health has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% 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, OPKO Health has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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