A month has gone by since the last earnings report for Medicines Co. (MDCO - Free Report) . Shares have added about 2.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Medicines Co. 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.
Medicines Company’s Q2 Loss Narrows, Revenues Tank Y/Y
The Medicines Company incurred second-quarter 2018 loss of 63 cents per share, narrower than the Zacks Consensus Estimate of a loss of 64 cents and the year-ago loss of 72 cents.
Quarterly revenues plunged 84.7% year over year to $1.7 million. Also, the top line missed the Zacks Consensus Estimate of $7.58 million. This downside in the quarter was mainly attributable to lower sales of Angiomax, which faces generic competition in the United States.
Adjusted research and development (R&D) expenses (excluding the impact of one-time items) increased 27.1% year over year to $26.4 million, primarily due to higher spend to support inclisiran.
Adjusted selling, general and administrative (SG&A) expenses (excluding the impact of one-time items) declined 52.4% to $15.2 million.
The company believes that its $162.5 million in cash and cash equivalents as of Jun 30, 2018 along with some fixed and non-fixed source of payments is expected to be enough to fund operations till inclisiran’s launch.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted 33.91% due to these changes.
At this time, Medicines Co. has a subpar Growth Score of D, however its Momentum Score 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 bottom 20% 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 style scores.
Estimates have been broadly trending downward for the stock, and the magnitude of this revision looks promising. Notably, Medicines Co. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.