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Clovis (CLVS) Up 45.1% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Clovis Oncology (CLVS - Free Report) . Shares have added about 45.1% in that time frame, outperforming the S&P 500.

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

Clovis Q3 Earnings & Sales Lag, Rubraca Disappoints

Clovis incurred an adjusted loss of $1.71 per share in the third quarter of 2018, wider than the Zacks Consensus Estimate of a loss of $1.60 and the year-ago loss of $1.24 per share.

Net revenues, entirely from Clovis’ only marketed drug, Rubraca, were approximately $22.8 million in the quarter, down 4.2% sequentially. This can be attributed to challenges in adoption in earlier-line setting. Revenues missed the Zacks Consensus Estimate of $30.12 million. The company had recorded total revenues of $16.8 million entirely from Rubraca sales in the year-ago quarter.

Clovis stated that Rubraca is failing to capture significant share in the second-line maintenance ovarian cancer market as it has to compete with PARP inhibitors and other approved therapies. This is hurting sales of Rubraca. The company expects Rubraca sales to be similar or slightly higher than $22.8 million in the fourth quarter. The Zacks Consensus Estimate for the fourth quarter is pegged at $40.24 million.

Quarter in Detail

During the third quarter, research & development expenses increased 64.3% year over year to $63.9 million primarily due to increased expenses for clinical studies on Rubraca. Selling, general and administrative (SG&A) expenses escalated 21.4% year over year to $42.5 million, reflecting increased activities to support commercialization of Rubraca in the United States as well as Europe.

Cash used in operating activities in the quarter was $72.5 million, higher than $45.8 million in the year-ago quarter.

Clovis ended the quarter with $604.4 million of cash equivalents and available-for-sale securities compared with $682.2 million as of Jun 30, 2018.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted -18.68% due to these changes.

VGM Scores

Currently, Clovis has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. 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.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Clovis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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