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Why Is Intersect ENT (XENT) Down 0.6% Since Last Earnings Report?

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A month has gone by since the last earnings report for Intersect ENT . Shares have lost about 0.6% in that time frame, outperforming 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 Q3 Loss Wider Than Expected, Revenues Miss

Intersect ENT reported third-quarter 2021 adjusted loss per share of 48 cents, wider than the Zacks Consensus Estimate of a loss of 42 cents. The figure was also wider than the year-ago adjusted loss of 34 cents per share. The reported quarter’s adjustments exclude a $13 million loss on embedded derivatives in convertible debt, $2.0 million of transaction costs, primarily associated with the Medtronic transaction, and $0.7 million of intangible asset amortization expense.

Meanwhile, without adjustments, GAAP net loss for the third quarter was 95 cents compared with the year-ago net loss of 35 cents.

Quarter in Detail

Reported third-quarter revenues increased 7% year over year to $24.4 million but missed the Zacks Consensus Estimate by 17.7%.

The cost of sales was $5.1 million in the reported quarter, down 35.1% year over year. Gross profit rose 29.8% to $19.3 million. Gross margin surged 79.2%, reflecting an expansion of 1368 basis points (bps) year over year.

Selling, general and administrative expenses rose 35.8% to $29.5 million in the quarter under review. Research and development expenses were $6.7 million, up 47.6% year over year.
The company reported an adjusted operating loss of $16.9 million, wider than the year-ago adjusted operating loss of $11.4 million.
The company ended the third quarter with cash, cash equivalents and short-term investments of $80.9 million compared with $88 million at 2020 end.

2021 Guidance Update

The company has not mentioned anything related to its guidance in its earnings release. Earlier in July, during the preliminary second-quarter results announcement, the company reiterated its full-year revenue guidance at the range of $117-$121 million. Full-year gross margin was expected to be in the low-to-mid 70% range.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

At this time, Intersect ENT has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest 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.


Intersect ENT has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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