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Theravance Bio (TBPH) Down 2.3% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Theravance Biopharma (TBPH - Free Report) . Shares have lost about 2.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Theravance Bio due for a breakout? 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.

Theravance Q2 Earnings Beat Estimates, Revenues Miss

Theravancereported second-quarter 2023 adjusted net loss of 13 cents per share, narrower than the Zacks Consensus Estimate of a loss of 16 cents. In the year-ago quarter, the company reported a loss of 17 cents per share.

The reported loss excludes share-based compensation expense and non-cash interest expense.

Revenues totaled $13.7 million, which missed the Zacks Consensus Estimate of $15 million. The figure was up 24.5% year over year.

Quarter in Detail

The top line almost fully comprised of Viatris collaboration revenues in relation to Yupelri. Yupelri collaboration revenues beat our model estimate of $13 million.

Research & development expenses (including share-based compensation) totaled $9.4 million, down 37% from the year-ago quarter’s level. Selling, general & administrative expenses (including share-based compensation) rose 19.1% year over year to $19.3 million.

2023 Guidance

Theravance continues to expect adjusted research & development expenses (excluding one-time restructuring expenses and share-based compensation) in the $35-$45 million range. Adjusted selling, general and administrative expenses are projected between $45 million and $55 million.

The company expects to generate adjusted profit in the second half of 2023.

Capital Return Program

In September 2022, Theravance initiated a $250 million capital return program. This included purchasing GSK’s entire equity stake in Theravance Biopharma, consisting of approximately 9.6 million shares at $9.75 per unit. 

TBPH has authorized a $75 million increase to the existing $250 million capital return program, bringing the total value to $325 million. Through June 2023, the company repurchased $263.8 million of stock of the $325 million shares authorized to be repurchased. The remaining $61.2 million, as of Jun 30, 2023, is expected to be completed by the end of 2023.

How Have Estimates Been Moving Since Then?

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

The consensus estimate has shifted -36.67% due to these changes.

VGM Scores

Currently, Theravance Bio has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% 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, Theravance Bio 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

Theravance Bio belongs to the Zacks Medical - Drugs industry. Another stock from the same industry, Corcept Therapeutics (CORT - Free Report) , has gained 3.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2023.

Corcept reported revenues of $117.72 million in the last reported quarter, representing a year-over-year change of +13.9%. EPS of $0.25 for the same period compares with $0.24 a year ago.

For the current quarter, Corcept is expected to post earnings of $0.20 per share, indicating a change of -33.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +1% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Corcept. Also, the stock has a VGM Score of C.


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