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Why Is Pacira (PCRX) Down 7.3% Since Last Earnings Report?

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It has been about a month since the last earnings report for Pacira (PCRX - Free Report) . Shares have lost about 7.3% in that time frame, underperforming the S&P 500.

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

Pacira Q3 Earnings and Revenues Surpass Estimates

Pacira reported third-quarter 2018 earnings of 31 cents per share, surpassing the Zacks Consensus Estimate of 7 cents and the year-ago bottom line of 11 cents.

Revenues increased 23.9% year over year to $83.4 million, beating the Zacks Consensus Estimate of $79 million and the year-ago figure of $67 million. Exparel sales came in at $82.2 million for the third quarter of 2018, rising 23% year over year. On an average, Exparel sales rose 6% sequentially.

Quarter in Detail

Pacira’s top line comprises product revenues, other product sales plus royalty revenues. Royalty revenues more than doubled to $0.74 million in the reported quarter.

Research and development (R&D) expenses (excluding the impact of stock-based compensation) were up 25.8% to $13.7 million. This increase in R&D expenses was due to the scale-up of the company’s manufacturing capacity in Swindon.

Selling, general and administrative (SG&A) expenses increased 11.8% to $38.3 million because of an expanded public affairs campaign focused on improving access to non-opioid options and expenses related to the launch of Exparel for brachial plexus nerve block.

2018 Outlook

Pacira raised its guidance for Exparel sales in 2018 and expects it to be in the range of $325-$330 million. The previous view was in the band of $320-$325 million.

The company expects R&D expenses (excluding stock-based compensation) to be within $50-$60 million while SG&A expenses (excluding stock-based compensation) are anticipated in the $150-$160 million range. Also, stock-based compensation is projected between $30 million and $35 million. All these remain unchanged from the last reported quarter’s forecast.

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 2671.43% due to these changes.

VGM Scores

Currently, Pacira has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, 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 B. 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 indicates a downward shift. It comes with little surprise Pacira has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.




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