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Editas (EDIT) Down 17% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Editas Medicine (EDIT - Free Report) . Shares have lost about 17% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Editas 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.
Editas Q2 Earnings & Revenues Miss Estimates
Editasincurred a loss of 82 cents per share in the second quarter of 2024, wider than the Zacks Consensus Estimate of a loss of 69 cents. The company had reported a loss of 56 cents per share in the year-ago quarter.
Collaboration and other research and development (R&D) revenues, which comprise the company’s top line, were $0.5 million in the second quarter, down from $2.9 million reported in the year-ago quarter. The reported figure missed the Zacks Consensus Estimate of $7 million. The year-over-year decline in revenues can be attributed to reduced drug supply activity with collaborators.
Quarter in Detail
In the second quarter of 2024, R&D expenses increased 82% to $54.2 million compared with $29.8 million reported in the year-ago period. The massive uptick in R&D expenses can be attributed to higher clinical and manufacturing costs related to the accelerated progression of Editas’ reni-cel program as well as costs attributable to other research activities.
General and administrative expenses were $18.2 million in the reported quarter, up 6% year over year, due to higher intellectual property and patent-related fees due to increased legal activity.
Editas had cash, cash equivalents and investments worth $318.3 million as of June 30, 2024, down from $376.8 million recorded as of March 31, 2024. The company expects its existing cash, cash equivalents and marketable securities, together with the near-term annual license fees and the contingent upfront payment from Vertex, to fund operating expenses and capital expenditure in 2026.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -20.88% due to these changes.
VGM Scores
Currently, Editas has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, 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 downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Editas 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
Editas is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Exact Sciences (EXAS - Free Report) , a stock from the same industry, has gained 6.4%. The company reported its results for the quarter ended June 2024 more than a month ago.
Exact Sciences reported revenues of $699.26 million in the last reported quarter, representing a year-over-year change of +12.4%. EPS of -$0.09 for the same period compares with -$0.45 a year ago.
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Editas (EDIT) Down 17% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Editas Medicine (EDIT - Free Report) . Shares have lost about 17% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Editas 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.
Editas Q2 Earnings & Revenues Miss Estimates
Editasincurred a loss of 82 cents per share in the second quarter of 2024, wider than the Zacks Consensus Estimate of a loss of 69 cents. The company had reported a loss of 56 cents per share in the year-ago quarter.
Collaboration and other research and development (R&D) revenues, which comprise the company’s top line, were $0.5 million in the second quarter, down from $2.9 million reported in the year-ago quarter. The reported figure missed the Zacks Consensus Estimate of $7 million. The year-over-year decline in revenues can be attributed to reduced drug supply activity with collaborators.
Quarter in Detail
In the second quarter of 2024, R&D expenses increased 82% to $54.2 million compared with $29.8 million reported in the year-ago period. The massive uptick in R&D expenses can be attributed to higher clinical and manufacturing costs related to the accelerated progression of Editas’ reni-cel program as well as costs attributable to other research activities.
General and administrative expenses were $18.2 million in the reported quarter, up 6% year over year, due to higher intellectual property and patent-related fees due to increased legal activity.
Editas had cash, cash equivalents and investments worth $318.3 million as of June 30, 2024, down from $376.8 million recorded as of March 31, 2024. The company expects its existing cash, cash equivalents and marketable securities, together with the near-term annual license fees and the contingent upfront payment from Vertex, to fund operating expenses and capital expenditure in 2026.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -20.88% due to these changes.
VGM Scores
Currently, Editas has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, 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 downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Editas 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
Editas is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Exact Sciences (EXAS - Free Report) , a stock from the same industry, has gained 6.4%. The company reported its results for the quarter ended June 2024 more than a month ago.
Exact Sciences reported revenues of $699.26 million in the last reported quarter, representing a year-over-year change of +12.4%. EPS of -$0.09 for the same period compares with -$0.45 a year ago.