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Why Is AVEO (AVEO) Down 0.1% Since Last Earnings Report?

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A month has gone by since the last earnings report for AVEO Pharmaceuticals (AVEO - Free Report) . Shares have lost about 0.1% in that time frame, underperforming the S&P 500.

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

AVEO Pharmaceuticals Q3 Earnings & Revenues Top Mark

AVEO reported earnings of 10 cents per share in the third quarter of 2019, surpassing the Zacks Consensus Estimate of 1 cent. It also rebounded from the year-ago loss of 18 cents.

The company’s top line comprises collaboration and licensing revenues plus partnership royalties. Total revenues in the reported quarter were $25.7 million, up from $2.5 million in the year-ago period. Revenues also comprehensively beat the Zacks Consensus Estimate of $13 million.

Operating Expenses

Research & development expenses were down 22.8% year over year to $3.9 million. However, general and administrative expenses increased 7.4% year over year to $2.9 million.

Cash Guidance

AVEO had around $57.7 million worth of cash, cash equivalents and marketable securities as of Sep 30, 2019 compared with $40.2 million on Jun 30, 2019. The company believes that this will help fund its planned operations through the second quarter of 2021.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -125% due to these changes.

VGM Scores

At this time, AVEO has a strong Growth Score of A, a grade with the same score on the momentum front. However, 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 A. 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 this revision indicates a downward shift. Notably, AVEO has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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