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Why Is Intersect ENT (XENT) Down 8.3% Since Last Earnings Report?

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It has been about a month since the last earnings report for Intersect ENT (XENT - Free Report) . Shares have lost about 8.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Intersect ENT 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 drivers.

 Intersect Q1 Loss Wider Than Estimates, Revenues Top

Intersect ENT reported first-quarter 2019 loss per share of 35 cents, wider than the Zacks Consensus Estimate of a loss of 30 cents. The reported loss was much wider than the year-ago loss of 21 cents.

Reported revenues in the first quarter grew 8.1% year over year to $26.7 million and also exceeded the Zacks Consensus Estimate by 1.5%. The upside can be attributed to higher uptake of the PROPEL family of steroid releasing implants and the commercialization of the SINUVA Sinus Implant. SINUVA accounted for around 4% of first-quarter 2019 revenues.

Margins

Cost of sales during the reported quarter was $4.6 million, down 15.3% year over year. Gross margin came in at 82.6%, reflecting a 476-basis point (bps) expansion year over year.
Selling, general and administrative expenses were up 26.5% to $27.2 million in the quarter under review. Research and development expenses were $6.3 million, up 46.6% year over year. The company reported operating loss of $11.4 million as compared with year-ago operating loss of $6.5 million.

Cash Position

Intersect ENT exited the first quarter of 2019 with cash, cash equivalents and short-term investments of $97.6 million compared with $100.8 million at the end of 2018.

2019 Guidance

Intersect ENT has slashed its 2019 full-year revenue view to the range of $113-$117 million compared to the prior guidance of $123-$127 million. The Zacks Consensus Estimate for the metric is pegged at $125.1 million, within the guidance.

The company’s 2019 outlook for the gross margin has been reaffirmed at 80-81%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -30.77% due to these changes.

VGM Scores

At this time, Intersect ENT has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Intersect ENT has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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