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Why Is Karuna Therapeutics, Inc. (KRTX) Up 8.4% Since Last Earnings Report?

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It has been about a month since the last earnings report for Karuna Therapeutics, Inc. (KRTX - Free Report) . Shares have added about 8.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Karuna Therapeutics, Inc. due for a pullback? 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.

Karuna Therapeutics Posts Wider-Than Expected Q2 Loss

Karuna Therapeutics reported a loss of $2.17 per share in second-quarter 2022, wider than the Zacks Consensus Estimate of a loss of $2.02 and the year-ago quarter’s loss of $1.17.

During the quarter, Karuna Therapeutics recorded $5.3 million as licensing revenue received from Zai Lab. It did not record any revenue in the year-ago quarter.

Quarter in Detail

For the reported quarter, research and development expenses were $52.5 million, up 117.4% from the year-ago figure, due to increased costs for developing Karuna Therapeutics’ clinical programs plus higher employee-related expenses.

General and administrative expenses also surged 71.8% year over year to $17.8 million due to higher employee-related costs.

As of Jun 30, 2022, KRTX had cash, cash equivalents and marketable securities of $407.4 million compared with $443.2 million on Mar 31, 2022.

Karuna Therapeutics expects its current cash balance to fund its operations for at least 12 months following the potential new drug application (NDA) submission to the FDA for the lead pipeline candidate, KarXT, in schizophrenia.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

Currently, Karuna Therapeutics, Inc. has a poor Growth Score of F, a grade with the same score on the momentum front. 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 F. 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, Karuna Therapeutics, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Karuna Therapeutics, Inc. belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, IVERIC bio (ISEE - Free Report) , has gained 17.3% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.

IVERIC bio reported revenues of $0 million in the last reported quarter, representing a year-over-year change of


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