It has been about a month since the last earnings report for Intersect ENT . Shares have lost about 10.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Intersect ENT 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.
Intersect ENT Q1 Loss Wider Than Expected, Revenues Top
Intersect ENT reported first-quarter 2021 adjusted loss per share of 51 cents, wider than the Zacks Consensus Estimate of a loss of 42 cents. However, the bottom line was narrower than the year-ago adjusted loss of 54 cents. The quarter’s adjustments exclude the impact of certain integration costs and others.
Meanwhile, without adjustments, GAAP net loss for the first quarter was 61 cents compared with the year-ago loss of 54 cents.
Revenues in Detail
Reported revenues in the first quarter increased 22.7% year over year to $24.3 million and exceeded the Zacks Consensus Estimate by 4.4%. This year-over-year growth was led by higher PROPEL revenues resulting from the lower impact on demand from the COVID-19 pandemic on elective surgical procedures. The company also generated increased SINUVA revenues from improved access and coverage and a shift in sinus procedures toward ambulatory surgery centers and the office setting of care.
Margins
Cost of sales was $8.5 million in the reported quarter, up 31.9% year over year. Gross profit rose 18.3% to $15.9 million. Gross margin was 65.3%, reflecting a contraction of 242 basis points (bps) year over year.
Selling, general and administrative expenses rose 7.2% to $28.1 million in the quarter under review. Research and development expenses were $6.4 million, up 23.8% year over year. Total operating expenses were $34.4 million in the first quarter, up 9.9% year over year.
The company reported adjusted operating loss of $18.6 million, wider than the year-ago adjusted operating loss of $17.9 million.
Cash Position
Intersect ENT exited the first quarter of 2021 with cash, cash equivalents and short-term investments of $70.5 million compared with $88 million on a sequential basis.
2021 Guidance Raised
Taking into account the ongoing improvement in the pandemic situation, the rebound in elective procedures and gradual reopening of the hospital setting of care plus to leverage its wide portfolio of products, the company has raised its 2021 revenue guidance.
Intersect ENT now expects revenues in the range of $117-$121 million (up from the previously guided range of $116-$120 million). The Zacks Consensus Estimate for revenues is pegged at $118.9 million.
Gross margin is expected to be in the low-to-mid 70% range.
The company’s 2021 guidance represents the estimated recovery of COVID-impacted elective sinus procedures supported by a substantial rise in the number of individuals getting vaccinated against COVID-19.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, Intersect ENT has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Intersect ENT has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Intersect ENT (XENT) Down 10.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Intersect ENT . Shares have lost about 10.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Intersect ENT 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.
Intersect ENT Q1 Loss Wider Than Expected, Revenues Top
Intersect ENT reported first-quarter 2021 adjusted loss per share of 51 cents, wider than the Zacks Consensus Estimate of a loss of 42 cents. However, the bottom line was narrower than the year-ago adjusted loss of 54 cents. The quarter’s adjustments exclude the impact of certain integration costs and others.
Meanwhile, without adjustments, GAAP net loss for the first quarter was 61 cents compared with the year-ago loss of 54 cents.
Revenues in Detail
Reported revenues in the first quarter increased 22.7% year over year to $24.3 million and exceeded the Zacks Consensus Estimate by 4.4%. This year-over-year growth was led by higher PROPEL revenues resulting from the lower impact on demand from the COVID-19 pandemic on elective surgical procedures. The company also generated increased SINUVA revenues from improved access and coverage and a shift in sinus procedures toward ambulatory surgery centers and the office setting of care.
Margins
Cost of sales was $8.5 million in the reported quarter, up 31.9% year over year. Gross profit rose 18.3% to $15.9 million. Gross margin was 65.3%, reflecting a contraction of 242 basis points (bps) year over year.
Selling, general and administrative expenses rose 7.2% to $28.1 million in the quarter under review. Research and development expenses were $6.4 million, up 23.8% year over year. Total operating expenses were $34.4 million in the first quarter, up 9.9% year over year.
The company reported adjusted operating loss of $18.6 million, wider than the year-ago adjusted operating loss of $17.9 million.
Cash Position
Intersect ENT exited the first quarter of 2021 with cash, cash equivalents and short-term investments of $70.5 million compared with $88 million on a sequential basis.
2021 Guidance Raised
Taking into account the ongoing improvement in the pandemic situation, the rebound in elective procedures and gradual reopening of the hospital setting of care plus to leverage its wide portfolio of products, the company has raised its 2021 revenue guidance.
Intersect ENT now expects revenues in the range of $117-$121 million (up from the previously guided range of $116-$120 million). The Zacks Consensus Estimate for revenues is pegged at $118.9 million.
Gross margin is expected to be in the low-to-mid 70% range.
The company’s 2021 guidance represents the estimated recovery of COVID-impacted elective sinus procedures supported by a substantial rise in the number of individuals getting vaccinated against COVID-19.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, Intersect ENT has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Intersect ENT has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.