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

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Intrexon Corporation (XON - Free Report) is expected to report second-quarter 2018 results on Aug 8, after the market closes.

In the last reported quarter, the company delivered a positive earnings surprise of 29.17%. Intrexon has an impressive surprise history. Of the trailing four quarters, the company surpassed estimates in all, with an average surprise beat of 26.81%.

Intrexon’s shares have returned 21.6% year to date, outperforming the industry’s growth of 13.1%.

Factors to Consider

Intrexon’s business model helps it commercialize 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. This facilitates the company to bring new and improved products and processes in the market. These agreements help Intrexon generate funds in the form of technology access fees and milestones along with other payments.

Intrexon is collaborating with various companies for developing several candidates. The company teamed up with Fibrocell Science, Inc. (FCSC - Free Report) and completed enrollment in a phase I/II study on FCX-007 for recessive dystrophic epidermolysis bullosa. In January 2018, Fibrocell received an approval from the FDA to initiate enrollment of pediatric patients in the phase II portion of the phase I/II study of FCX-007.

Also, the second gene therapy candidate, FCX-013, is being developed by Fibrocell for the treatment of linear scleroderma.

Another collaborator, Oragenics, is developing AG013 for the prevention and treatment of oral mucositis in a phase II study.  Oragenics utilizes Intrexon’s ActoBiotics platform.

Intrexon’s expanding portfolio of technologies has enabled the company develop a robust pipeline. The company’s efforts to growth by acquisitions and ECCs are encouraging. Therefore, we expect investors’ focus to remain on the company’s performance along with other developmental updates during the quarterly call.

What Our Model Indicates

Our proven model does not show an earnings beat for Intrexon this quarter. This 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.

Earnings ESP: Intrexon has an Earnings ESP of -29.03% as the Most Accurate Estimate is pegged at a loss of 30 cents and the Zacks Consensus Estimate is pegged at a loss of 23 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Intrexon has a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive Earnings ESP to be confident of an earnings beat.

Note that Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement are best avoided.

 

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.

Pacira Pharmaceuticals, Inc. (PCRX - Free Report) has an Earnings ESP of +42.86% and currently carries a Zacks Rank #2. The company is scheduled to release second-quarter report on Aug 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Endo International Plc. (ENDP - Free Report) has an Earnings ESP of +1.37% and currently carries a Zacks Rank #3. The company is scheduled to release second-quarter results on Aug 8.

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