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Why is Aduro (ADRO) Up 18.6% Since Its Last Earnings Report?

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It has been about a month since the last earnings report for Aduro Biotech, Inc. (ADRO - Free Report) . Shares have added about 18.6% in that time frame.

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

Aduro Q1 Loss Narrower Than Expected, Revenues Beat

Aduro incurred first-quarter 2018 loss of 28 cents per share, narrower than both the Zacks Consensus Estimate of a loss of 30 cents and the year-ago loss of 32 cents.

Quarterly revenues soared substantially 73.7% year over year to $6.6 million. This upside can mainly be attributed to a receipt of $3 million milestone payment from Merck under Aduro’s worldwide licensing agreement with the company for initiation of a phase I study, evaluating its own anti-CD27 antibody. The top line also surpassed the Zacks Consensus Estimate of $4 million.

Research and development expenses slightly dipped 2.4% in the reported quarter to $20.1 million, mainly owing to lower contract manufacturing expense of $3.1 million. This is primarily related to the company’s pipeline candidate, BION-1301,. However, this was offset by an increase in costs related to manufacturing of B-select antibodies and the company’s personalized neoantigen-based immunotherapy.

General and administrative expenses were $9 million, up 8.4% year over year on higher stock-based compensation expense and legal fees.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to two lower.

Aduro Biotech, Inc. Price and Consensus

 

Aduro Biotech, Inc. Price and Consensus | Aduro Biotech, Inc. Quote

VGM Scores

At this time, ADRO has a subpar Growth Score of D, however its Momentum is doing a lot better with a B. The stock was allocated a grade of F on the value side, putting it in the fifth 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

Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, ADRO has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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