A month has gone by since the last earnings report for Conatus Pharmaceuticals (CNAT - Free Report) . Shares have added about 4.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Conatus 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.
Conatus' Q3 Loss In Line, Revenues Lag Estimates
Conatus incurred a loss of 15 cents per share for the third quarter of 2018, meeting the Zacks Consensus Estimate. However, the figure was wider than the year-ago quarter’s loss of 13 cents per share.
Revenues came in at $7.7 million, down 23% year over year due to lower reimbursement from partner Novartis for the costs incurred to support development of emricasan. The top-line marginally missed the Zacks Consensus Estimate of $9.7 million.
Conatus has no approved product in its portfolio at the moment. The revenues generated by the company are all related to its collaboration with Novartis for the worldwide development and commercialization of emricasan.
In the third quarter, research and development expenses were $9.7 million, down 13.4% from the year-ago period’s figure, mainly owing to lower spending associated with the ongoing ENCORE -NF and ENCORE-PH studies on emricasan. This was partially offset by higher spending in the ENCORE-LF study on the same candidate.
General and administrative expenses were $2.7 million, marginally up from the year-ago quarter’s $2.4 million on higher personnel costs.
Conatus continues to expect its 2018 year-end cash balance between $35 million and $40 million.
However, with Novartis sharing half of Conatus’ development costs for emricasan, the latter expects its current financial resources to be sufficient for funding operations through the end of 2019.
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 28.87% due to these changes.
At this time, Conatus has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the fifth 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.
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Conatus has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.