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Why Is AVEO Pharmaceuticals (AVEO) Up 25% Since the Last Earnings Report?

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It has been about a month since the last earnings report for AVEO Pharmaceuticals, Inc. . Shares have added about 25% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

AVEO Posts Narrower-than-Expected Loss

AVEO reported first-quarter 2017 loss of 12 cents per share, narrower than the Zacks Consensus Estimate as well as the year-ago loss of 13 cents.

AVEO does not have any approved products in its portfolio. The company’s top line mainly comprises collaboration revenues, milestone and other payments. Total collaboration revenue in the first quarter was approximately $2.5 million compared with $1.2 million in the year-ago quarter.

Quarterly Highlights

Research & development expenses were up 33.2% to about $8 million. However, general and administrative expenses decreased 5.4% year over year to $2.3 million.

2017 Guidance

AVEO expects that its present cash resources of $33.4 million will allow the company to fund its planned operations in the second quarter of 2018.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.

AVEO Pharmaceuticals, Inc. Price and Consensus

 

VGM Scores

At this time, the stock has a poor Growth Score of 'F', however its momentum is doing a lot better with an 'A'. However, 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.

The company's stock is suitable solely for momentum based on our styles scores.

Outlook

The stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.

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