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Global Blood (GBT) Down 1% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Global Blood Therapeutics (GBT - Free Report) . Shares have lost about 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 Global Blood 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.

Global Blood Incurs Wider-Than-Expected Loss in Q4

The company incurred a loss of 93 cents in the fourth quarter of 2018, narrower than a loss of 95 cents incurred in the year-ago quarter but wider than the Zacks Consensus Estimate of a loss of 88 cents.

Research and development (R&D) expenses for the fourth quarter were $36.8 million, up 17.8% year over year. The increase in R&D expenses was mainly due to increased costs for the phase IIa HOPE-KIDS 1 study and the HOPE study along with higher levels of manufacturing activities to support the clinical programs and prepare for commercial launch of voxelotor. 

G&A expenses in the fourth quarter were $15.3 million, up 44.3% year over year. The increase in expenses was due to increased employee-related costs, including non-cash stock compensation, and increased professional and consulting services associated with the growth of the company’s operations.

The company expects net loss to increase during 2019, as it will expand its manufacturing efforts for voxelotor, conduct additional clinical studies for the same and continue the ongoing studies. The company also expects to witness an increase in general and administrative (G&A) spending, as it looks to build commercial infrastructure and prepare for the potential commercial launch of voxelotor.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -5.56% due to these changes.

VGM Scores

At this time, Global Blood has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Global Blood has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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