A month has gone by since the last earnings report for Reata Pharmaceuticals, Inc. . Shares have added about 6.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Reata Pharmaceuticals, 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 catalysts.

Q1 Earnings & Sales Miss Estimates

Reata Pharmaceuticals reported a first-quarter 2023 adjusted loss of $3.14 per share, wider than the Zacks Consensus Estimate of a loss of $2.34. In the year-ago quarter, the company registered an adjusted loss of $2.03 per share.

The bottom line included stock-based compensation expenses and non-cash interest expense from liability related to the sale of future royalties. Excluding these, the adjusted loss was $1.81 per share in the reported quarter compared with $1.33 in the prior-year period.

Total revenues, including collaboration revenues, came in at $0.2 million, significantly down from the year-ago quarter’s $0.9 million. The decline was primarily due to the company reaching the end of the performance obligation with the Kyowa Kirin Agreement as of Jun 30, 2022. The top line missed the Zacks Consensus Estimate of $1 million.

Quarter in Detail

Research and development expenses increased 40% year over year to $55.4 million due to a surge in costs for ongoing clinical studies.

General and administrative expenses totaled $54.8 million, up 121% from that recorded in the year-ago period. This increase was due to a rise in commercial activities for Skyclarys.

Cash, cash equivalents and marketable securities amounted to $321 million as of Mar 31, 2023, compared with $387.5 million as of Dec 31, 2022. Reata expects its cash resources to fund operations through 2026-end.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -24.37% due to these changes.

VGM Scores

Currently, Reata Pharmaceuticals, Inc. has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Following the exact same course, 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 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, Reata Pharmaceuticals, 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

Reata Pharmaceuticals, Inc. belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Intra-Cellular Therapies (ITCI Quick QuoteITCI - Free Report) , has gained 1.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.

Intra-Cellular reported revenues of $95.31 million in the last reported quarter, representing a year-over-year change of +172.3%. EPS of -$0.46 for the same period compares with -$0.78 a year ago.

For the current quarter, Intra-Cellular is expected to post a loss of $0.64 per share, indicating a change of +30.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.5% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Intra-Cellular. Also, the stock has a VGM Score of D.