It has been about a month since the last earnings report for Intrexon (XON - Free Report) . Shares have added about 24.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Intrexon 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 catalysts.
Intrexon Reports In-Line Q1 Loss, Misses on Revenues
Intrexon incurred a loss of 28 cents per share (excluding non-cash charge of $17.8 million) in first-quarter 2019, wider than a loss of 17 cents recorded in the year-ago period and in line with the Zacks Consensus Estimate.
Total revenues came in at $23.3 million, reflecting a 41.1% decline from the year-ago quarter. The top line also missed the Zacks Consensus Estimate of $35 million.
Recent Business Highlights
Intrexon sales primarily consist of collaboration and licensing revenues, and product and service revenues.
Collaboration and licensing revenues in the reported quarter decreased 70% from the prior-year quarter to $5.97 million.
Product revenues came in at $4.9 million, down 32.1% from the year-ago period. Service revenues totaled $11.4 million, down 7.1% year over year.
Intrexon follows a business model, under which the company commercializes its technologies through exclusive channel collaborations (ECC), licensing agreements and joint ventures that have market and product development expertise, and sales and marketing capabilities to bring new and improved products and processes to the market. Such agreements provide the company with funds in the form of technology access fees, and milestones and other payments.
Intrexon announced alignment of its operations into two units — Intrexon Health and Intrexon Bioengineering — to better deploy resources, realize inherent synergies and drive growth with core focus on healthcare.
Meanwhile, the company is developing several candidates in partnership with other companies.
Intrexon structured its principal healthcare assets into two separate wholly-owned subsidiaries — Precigen, Inc., which is a gene and cell therapy company developing precision medicines, and ActoBio Therapeutics, Inc., a company focused on therapeutic delivery of biologics to the site of disease via its proprietary, ActoBiotics platform. From Jan 1, 2018, Precigen and ActoBio Therapeutics began operating as two separate entities. Both the companies are now wholly-owned subsidiaries of Intrexon.
The company entered a strategic licensing agreement with Surterra Wellness to utilize its Botticelli next generation plant propagation platform to enable rapid production of proprietary cannabis cultivars of the latter for the Florida market.
AquaBounty Technologies, Inc., a subsidiary of Intrexon, announced that the FDA lifted the Import Alert on AquAdvantage Salmon (AAS) in March. Environment and Climate Change Canada has also approved the company's Rollo Bay production facility for the commercial manufacture and grow-out of AAS.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
Currently, Intrexon 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. Notably, Intrexon has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.