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Why Is Geron (GERN) Up 58% Since Last Earnings Report?

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A month has gone by since the last earnings report for Geron (GERN - Free Report) . Shares have added about 58% in that time frame, outperforming the S&P 500.

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

Geron’s Q2 Loss Flat Y/Y, Revenues Up

Geron reported a loss of 4 cents per share for the second quarter of 2018, in line with the Zacks Consensus Estimates and flat year over year.

Quarterly revenues increased 19.5% from the year-ago quarter to $0.21 million. Revenues comprised royalty and license fee revenues received under various non-imetelstat license agreements.

Research and development (R&D) expenses increased 28% to $3.2 million. The rise was due to variation in costs for the proportionate share of clinical development of imetelstat under collaboration with Janssen. General and administrative (G&A) expenses fell 4.5% to $4.2 million.

The company ended the quarter with $181.4 million in cash and investments compared with $103.2 million at the end of the first quarter. The increase in cash was due to $87 million net of proceeds raised through sale of its common stock under At Market Issuance Sales Agreements.

How Have Estimates Been Moving Since Then?

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

VGM Scores

Currently, Geron has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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.

Our style scores indicate investors will probably be better served looking elsewhere.

Outlook

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


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