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Ligand (LGND) Down 4.9% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Ligand Pharmaceuticals (LGND - Free Report) . Shares have lost about 4.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ligand 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.
Ligand Beats Q1 Earnings & Sales Estimates
Ligand reported first-quarter 2022 adjusted earnings of 76 cents per share, beating the Zacks Consensus Estimate of 61 cents. The company had reported adjusted earnings of $1.41 in the year-ago quarter.
Total revenues of $45.7 million declined 17.2% from the year-ago quarter as growth in Royalties and Contract revenues was more than offset by lower Captisol sales. The top line, however, beat the Zacks Consensus Estimate of $34.31 million.
Quarterly Highlights
Royalty revenues were up 92.6% year over year to $13.7 million in the first quarter. Growth in Royalties was mainly driven by additional sales of drugs developed using its Pelican platform.
The OmniAb business generated $0.3 million of total royalties in the first quarter.
Total Captisol sales declined 61.2% year over year to $12.1 million. The decrease was due to lower sales of Captisol to support the manufacturing of Veklury whose sales were hurt by lower demand.
Ligand reported its Captisol sales separately from core assets and COVID-related sales. The core Captisol sales were $6.2 million compared with $1.3 million in the year-ago quarter. However, COVID-related Captisol sales decreased from $30 million in the year-ago quarter to $5.9 million during the first quarter of 2022.
Ligand reported adjusted earnings of 58 cents during the first quarter, excluding COVID-19 related Captisol sales.
Contract revenues were up 18.5% year over year to $19.9 million in the first quarter. OmniAb business generated $8.9 million of total Contract revenues in the first quarter.
2022 Guidance
Ligand reiterated guidance for sales from its combined business for 2022. On its first-quarter earnings call, the company also provided revenue guidance for its OmniAb business separately.
Ligand expects total revenues to be between $147 million and $172 million in 2022, suggesting a significant year-over-year decline. The company continues to expect royalties in the range of $55 million to $60 million, Captisol sales are expected to be between $40 million and $50 million while contract revenues are expected in the range of $52 million to $62 million. It expects core Captisol sales to be in the range of $17 million to $19 million and the remaining Captisol sales from COVID-related therapies.
Ligand expects the OmniAb business to generate $35 million to $45 million of revenues, especially in the contract revenue line.
The company expects its adjusted earnings to be in the range of $1.50 to $1.80 per share in 2022, excluding OmniAb and COVID-related Captisol sales that are likely to add between 20 cents and 40 cents per share.
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 -100% due to these changes.
VGM Scores
Currently, Ligand has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, 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 broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Ligand has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Ligand belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Seattle Genetics , has gained 5.1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.
Seattle Genetics reported revenues of $426.46 million in the last reported quarter, representing a year-over-year change of +28.5%. EPS of -$0.74 for the same period compares with -$0.67 a year ago.
Seattle Genetics is expected to post a loss of $0.82 per share for the current quarter, representing a year-over-year change of -74.5%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Seattle Genetics. Also, the stock has a VGM Score of F.
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Ligand (LGND) Down 4.9% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Ligand Pharmaceuticals (LGND - Free Report) . Shares have lost about 4.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ligand 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.
Ligand Beats Q1 Earnings & Sales Estimates
Ligand reported first-quarter 2022 adjusted earnings of 76 cents per share, beating the Zacks Consensus Estimate of 61 cents. The company had reported adjusted earnings of $1.41 in the year-ago quarter.
Total revenues of $45.7 million declined 17.2% from the year-ago quarter as growth in Royalties and Contract revenues was more than offset by lower Captisol sales. The top line, however, beat the Zacks Consensus Estimate of $34.31 million.
Quarterly Highlights
Royalty revenues were up 92.6% year over year to $13.7 million in the first quarter. Growth in Royalties was mainly driven by additional sales of drugs developed using its Pelican platform.
The OmniAb business generated $0.3 million of total royalties in the first quarter.
Total Captisol sales declined 61.2% year over year to $12.1 million. The decrease was due to lower sales of Captisol to support the manufacturing of Veklury whose sales were hurt by lower demand.
Ligand reported its Captisol sales separately from core assets and COVID-related sales. The core Captisol sales were $6.2 million compared with $1.3 million in the year-ago quarter. However, COVID-related Captisol sales decreased from $30 million in the year-ago quarter to $5.9 million during the first quarter of 2022.
Ligand reported adjusted earnings of 58 cents during the first quarter, excluding COVID-19 related Captisol sales.
Contract revenues were up 18.5% year over year to $19.9 million in the first quarter. OmniAb business generated $8.9 million of total Contract revenues in the first quarter.
2022 Guidance
Ligand reiterated guidance for sales from its combined business for 2022. On its first-quarter earnings call, the company also provided revenue guidance for its OmniAb business separately.
Ligand expects total revenues to be between $147 million and $172 million in 2022, suggesting a significant year-over-year decline. The company continues to expect royalties in the range of $55 million to $60 million, Captisol sales are expected to be between $40 million and $50 million while contract revenues are expected in the range of $52 million to $62 million. It expects core Captisol sales to be in the range of $17 million to $19 million and the remaining Captisol sales from COVID-related therapies.
Ligand expects the OmniAb business to generate $35 million to $45 million of revenues, especially in the contract revenue line.
The company expects its adjusted earnings to be in the range of $1.50 to $1.80 per share in 2022, excluding OmniAb and COVID-related Captisol sales that are likely to add between 20 cents and 40 cents per share.
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 -100% due to these changes.
VGM Scores
Currently, Ligand has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, 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 broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Ligand has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Ligand belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Seattle Genetics , has gained 5.1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.
Seattle Genetics reported revenues of $426.46 million in the last reported quarter, representing a year-over-year change of +28.5%. EPS of -$0.74 for the same period compares with -$0.67 a year ago.
Seattle Genetics is expected to post a loss of $0.82 per share for the current quarter, representing a year-over-year change of -74.5%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Seattle Genetics. Also, the stock has a VGM Score of F.