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What's in Store for Intrexon (XON) This Earnings Season?

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Intrexon Corporation is scheduled to report second-quarter 2016 results on Aug 9, after market close. Intrexon’s performance has been mostly disappointing with the company missing estimates in three of the four trailing quarters with an average miss of 33.27%.

In the last reported quarter, the company posted a negative surprise of 10.34%. Let’s see how things have shaped up before the announcement.

Factors to Consider

Intrexon is a leader in the synthetic biology field, which applies engineering principles to biological systems to enable rational, design-based control of cellular function for a specific purpose across five key sectors – health, food, energy, environment and consumer. The company follows a business model under which it commercializes its technologies through exclusive channel collaborations (ECC), licensing agreements and joint ventures with collaborators that have market and product development expertise, as well as sales and marketing capabilities to bring new and improved products and processes to market.

Such deals provide the company with funds in the form of technology access fees, and milestones and other payments. The company has been very active on striking new ECCs and expanding partnership with existing ones. This quarter was no different.

We believe the company will continue to recognize revenues from these sources in the second quarter of 2016 as well.

Intrexon expects 2016 to be a breakout year for the health sector, from the viewpoint of moving programs into the clinic, in addition to the three studies that are currently underway. Intrexon anticipates that up to seven investigational new drugs and clinical trial initiations with the company’s existing ECC partners utilizing its technologies will take place in 2016, subject to FDA approval.

Focus will remain on the company’s performance along with other developmental updates.

What Our Model Indicates

Our proven model does not conclusively show that Intrexon is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to surpass estimates. That is not the case here, as you will see below.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is at 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at a loss of 23 cents per share.

Zacks Rank: Though Intrexon has a favorable Zacks Rank #2, an ESP of 0.00% makes a surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

INTREXON CORP Price and EPS Surprise

INTREXON CORP Price and EPS Surprise | INTREXON CORP Quote

Stocks that Warrant a Look

Here are some health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

The Earnings ESP for Ionis Pharmaceuticals, Inc. (IONS - Free Report) is +27.08% and carries a Zacks Rank #2. It is also scheduled to report second-quarter results on Aug 9.

Alcobra Ltd. has an Earnings ESP of +18.18% and carries a Zacks Rank #3. It is expected to report second-quarter results on Aug 11.

Seres Therapeutics, Inc. (MCRB - Free Report) has an Earnings ESP of +14.29% and carries a Zacks Rank #3. It is scheduled to report second-quarter results on Aug 11.

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