It has been about a month since the last earnings report for Reata Pharmaceuticals, Inc. (RETA). Shares have lost about 1.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Reata Pharmaceuticals, Inc. 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.
Reata Q3 Earnings Beat, Stock Up on Pipeline Updates
Reata Pharmaceuticals reported a loss of $2.16 per share in third-quarter 2022, narrower than the Zacks Consensus Estimate of a loss of $2.35. In the year-ago quarter, the company posted a loss of $1.97.
However, the above loss included stock-based compensation and a non-cash interest expense. Excuding these items, adjusted loss for the quarter was $1.47 per share, wider than the loss of $1.27 per share recorded in the year-ago period.
Total revenues, comprising collaboration revenues, were $0.54 million, significantly down from the year-ago quarter’s revenues of $7.4 million. Revenues missed the Zacks Consensus Estimate of $1 million.
Quarter in Detail
Adjusted research and development expenses were up 8.2% year over year to $36.8 million. Adjusted general and administrative expenses were $19.5 million, up 11.6% from the year-ago period.
The company had cash and cash equivalents and marketable securities of $435.9 million as of Sep 30, 2022, compared with $481.5 million as of Jun 30, 2022. The company expects its cash resources to fund operations through 2024-end.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -8.46% due to these changes.
VGM Scores
Currently, Reata Pharmaceuticals, Inc. has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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, Reata Pharmaceuticals, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Reata Pharmaceuticals, Inc. belongs to the Zacks Medical – Biomedical and Genetics industry. Another stock from the same industry, Horizon Therapeutics (HZNP), has gained 28.5% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Horizon Therapeutics reported revenues of $925.36 million in the last reported quarter, representing a year-over-year change of -10.8%. EPS of $1.25 for the same period compares with $1.75 a year ago.
For the current quarter, Horizon Therapeutics is expected to post earnings of $1.10 per share, indicating a change of -22% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.9% over the last 30 days.
Horizon Therapeutics has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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