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Why Is Mirati (MRTX) Down 19.9% Since Last Earnings Report?

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A month has gone by since the last earnings report for Mirati . Shares have lost about 19.9% in that time frame, underperforming the S&P 500.

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

Q3 Loss Narrower Than Expected, Sales Beat

Mirati reported a loss of $3.09 per share for third-quarter 2022, narrower than the Zacks Consensus Estimate of a loss of $3.46. However, the loss was wider than the year-ago quarter’s loss of $1.55 per share.

Mirati reported $5.43 million as license and collaboration revenues for the third quarter, beating the Zacks Consensus Estimate of $4.72 million. Mirati had recorded revenues of $0.7 million in the year-ago quarter. Third-quarter revenues were driven by a $5 million milestone payment from partner Zai Lab

Quarter in Detail

Research and development expenses rose 13% from the prior-year quarter’s level to $131.1 million due to higher headcount costs, which offset a decrease in manufacturing costs, following the FDA filing for adagrasib last year.

General and administrative expenses surged 72.7% from the year-ago quarter’s level to $60.8 million due to an increase in commercial readiness costs as the company prepares for a potential product launch for adagrasib in NSCLC.

Cash, cash equivalents and short-term investments as of Sep 30, 2022 were $1.2 billion, same as at the end of Jun 30, 2022.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

Currently, Mirati 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 bottom 20% 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, Mirati 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

Mirati is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Biogen Inc. (BIIB - Free Report) , a stock from the same industry, has gained 3.5%. The company reported its results for the quarter ended September 2022 more than a month ago.

Biogen Inc. reported revenues of $2.51 billion in the last reported quarter, representing a year-over-year change of -9.7%. EPS of $4.77 for the same period compares with $4.77 a year ago.

For the current quarter, Biogen Inc. is expected to post earnings of $3.41 per share, indicating a change of +0.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.9% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Biogen Inc. Also, the stock has a VGM Score of C.


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