A month has gone by since the last earnings report for OPKO Health (OPK Quick QuoteOPK - Free Report) . Shares have added about 18.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is OPKO Health 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.

OPKO Health Q3 Earnings Lag Estimates, Revenues Top

OPKO Health delivered a loss per share of 11 cents in the third quarter of 2023, flat compared with the year-ago period’s loss per share. However, the figure was wider than the Zacks Consensus Estimate of a loss of 9 cents per share.

Revenues in Detail

OPKO Health registered revenues of $178.6 million in the third quarter, down 0.6% year over year. The figure, however, surpassed the Zacks Consensus Estimate by 2.1%.

Lower revenues from services dragged the overall top line.

Segmental Revenues

OPKO Health manages its operations through two reportable segments – Diagnostics and Pharmaceuticals.

Within the Diagnostics arm, revenues from services amounted to $131.7 million in the reported quarter, down 7.8% year over year, primarily due to lower COVID-19 testing volume and reimbursement. Clinical test reimbursement also decreased due to the mix of testing ordered, partially offset by an increase in clinical test volume.

Within the Pharmaceuticals arm, revenues from products rose 25.6% to $40.7 million, primarily on the back of higher sales in OPKO Health’s international operating companies and increased revenues from Rayaldee sales.

Revenues from sales of Rayaldee in the third quarter of 2023 were $7.3 million, up 5.8% from the prior-year period.

Revenues from the transfer of intellectual property and other totaled $6.2 million, up 37.8% from the prior-year period.

Margin Analysis

In the quarter under review, OPKO Health’s gross profit rose 52.4% to $47.7 million. The gross margin expanded by a huge 929 basis points to 26.7%.

Selling, general and administrative expenses fell 9.3% to $72.3 million. R&D expenses climbed 3.2% year over year to $19.4 million. Adjusted operating expenses of $91.7 million decreased 6.9% year over year.

Adjusted operating loss totaled $44 million compared with the prior-year quarter’s adjusted operating loss of $67.2 million.

Financial Position

OPKO Health exited third-quarter 2023 with cash and cash equivalents of $138.6 million compared with $108.1 million at the second-quarter end.

Cumulative net cash provided by operating activities at the end of third-quarter 2023 was $10.1 million against cumulative net cash used in operating activities of $63.6 million a year ago.

Guidance

OPKO Health has provided its financial outlook for the fourth quarter of 2023.

For the fourth quarter, it expects total revenues between $170 million and $180 million. The Zacks Consensus Estimate currently stands at $191.3 million.

OPKO Health expects its revenues from services to lie between $126 million and $132 million and revenues from product sales to be in the range of $33 million-$36 million. Other revenues are expected to be between $8 million and $12 million, inclusive of the estimated Pfizer gross profit share of $8 million to $10 million.

How Have Estimates Been Moving Since Then?

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

The consensus estimate has shifted -28.57% due to these changes.

VGM Scores

At this time, OPKO Health has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 these revisions indicates a downward shift. Notably, OPKO Health 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

OPKO Health belongs to the Zacks Medical - Instruments industry. Another stock from the same industry, Penumbra (PEN Quick QuotePEN - Free Report) , has gained 12.4% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.

Penumbra reported revenues of $270.95 million in the last reported quarter, representing a year-over-year change of +26.8%. EPS of $0.67 for the same period compares with $0.01 a year ago.

Penumbra is expected to post earnings of $0.71 per share for the current quarter, representing a year-over-year change of +343.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.2%.

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