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Why Is Aduro Biotech (ADRO) Down 40.1% Since Last Earnings Report?

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It has been about a month since the last earnings report for Aduro Biotech (ADRO - Free Report) . Shares have lost about 40.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Aduro Biotech due for a breakout? 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 catalysts.

Aduro Q3 Loss Narrower Than Expected, Revenues Lag

Aduro incurred third-quarter 2018 loss of 29 cents per share, narrower than the Zacks Consensus Estimate of a loss of 31 cents and the year-ago loss of 33 cents.

Revenues came in at $3.1 million, down 17.3% year over year due to changes in revenue recognition methodology. The top line also missed the Zacks Consensus Estimate of $4.59 million.

Research and development expenses declined 23.6% in the reported quarter to $18.7 million owing to lower expenses related to the company’s pipeline candidates, namely ADU-1604 and BION-1301.

General and administrative expenses were $9.1 million, up 8.2% year over year, primarily on higher stock-based compensation expense and consulting costs.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

At this time, Aduro Biotech has a poor Growth Score of F, 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.

Outlook

Aduro Biotech has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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