It has been about a month since the last earnings report for Reata Pharmaceuticals, Inc. (RETA). Shares have lost about 6.2% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Reata Q2 Earnings and Revenues Beat Estimates
Reata reported second-quarter 2020 loss of $2.03 per share, narrower than the Zacks Consensus Estimate of loss of $2.22. However, the reported loss was wider than the year-ago loss of $1.14.
However, the above loss included stock-based compensation and certain one-time items. Adjusted loss for the quarter was $1.22 per share, wider than 99 cents per share recorded in year-ago period.
Total revenues, comprising collaboration revenues, were $3.1 million compared with $7.8 million in the year-ago quarter. The significant decline was due to lower license and milestone payments received in the quarter. However, the top line beat the Zacks Consensus Estimate of $1.45 million.
Quarter in Details
Adjusted research and development expenses increased 4.9% year over year to $29.3 million mainly due to higher late-stage clinical activities.
Adjusted general and administrative expenses were $9.3 million, up 5.1% from the year-ago period.
The company had cash and cash equivalents of $610.4 million as of Jun 30, 2020 compared with $624.5 million as of March end.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 10.89% due to these changes.
VGM Scores
Currently, Reata Pharmaceuticals, Inc. has a poor Growth Score of F, 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 looks promising. Notably, Reata Pharmaceuticals, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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