It has been about a month since the last earnings report for Allogene Therapeutics (ALLO). Shares have lost about 1.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Allogene Therapeutics 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.
Reports Narrower-Than-Expected Loss in Q3
Allogene incurred a loss of 58 cents per share in third-quarter 2022, narrower than the Zacks Consensus Estimate and our model estimate of a loss of 62 cents and 64 cents, respectively. In the year-ago quarter, the company reported a loss of 57 cents.
ALLO recorded revenues of $0.05 million during the quarter, missing the Zacks Consensus Estimate and our estimate of $0.09 million. Revenues were flat year over year.
Quarter in Detail
Research & development (R&D) expenses were $63.6 million, up 8.4% from the year-ago quarter’s level.
General and administrative (G&A) expenses declined 0.5% year over year to $18.9 million.
Allogene had $637.3 million of cash, cash equivalents and investments as of Sep 30, 2022, compared with $686.1 million as of Jun 30, 2022.
2022 Guidance Updated
Allogene anticipates operating expenses for the full year to be slightly below the low end of its previously-provided guidance of $360 million-$390 million.
Cash burn for the full year is expected to be less than $250 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, Allogene Therapeutics has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, 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 upward for the stock, and the magnitude of these revisions indicates a downward shift. It comes with little surprise Allogene Therapeutics has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Allogene Therapeutics is part of the Zacks Medical – Biomedical and Genetics industry. Over the past month, Gilead Sciences (GILD), a stock from the same industry, has gained 10.6%. The company reported its results for the quarter ended September 2022 more than a month ago.
Gilead reported revenues of $7.04 billion in the last reported quarter, representing a year-over-year change of -5.1%. EPS of $1.90 for the same period compares with $2.65 a year ago.
For the current quarter, Gilead is expected to post earnings of $1.50 per share, indicating a change of +117.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.1% over the last 30 days.
Gilead has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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