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Acorda (ACOR) Down 13.5% Since Last Earnings Report: Can It Rebound?

Zacks Equity Research

It has been about a month since the last earnings report for Acorda Therapeutics (ACOR). Shares have lost about 13.5% in that time frame, underperforming the S&P 500.

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

Acorda Q3 Earnings and Revenues Surpass Estimates

Acorda reported third-quarter 2019 loss per share of 46 cents, narrower than the Zacks Consensus Estimate of a loss of 51 cents. However, the figure came in against the year-ago earnings of 17 cents.

The company generated total revenues of $47.7 million in the third quarter, beating the Zacks Consensus Estimate of $44 million. However, sales tumbled 66.6% year over year due to lower sales of Ampyra.

Quarter in Detail

Inbrija generated sales of $4.9 million in the reported quarter, reflecting a sequential increase of 63.3%. Approximately 6,400 prescription request forms for Inbrija were received through October 2019. Per the company, total Inbrija prescriptions increased by more than 60% in the third quarter compared to the second quarter.

Majority of Acorda’s net product revenues are drawn from Ampyra, which generated sales of $37.6 million in the third quarter, reflecting a 72.7% plunge year over year and a 14.9% decline sequentially due to generic competition. Acorda believes that Ampyra sales will continue to see a sharp decline in the quarters ahead.

Royalty revenues were $2.9 million in the quarter, almost in line with the year-ago reported figure.

Research and development (R&D) expenses (excluding share-based compensation expenses) were $15.4 million, down 29.4% year over year.

Selling, general and administrative (SG&A) expenses (excluding share-based compensation expenses) were $46.3 million, up 16.9% year over year.

Acorda had $253 million worth of cash, cash equivalents and investments as of Sep 30, 2019 compared with $296.9 million as of Jun 30, 2019.

Guidance

Acorda expects R&D expenses in the range of $55-$60 million compared to the previous expectation of $70-$80 million. SG&A expenses’ guidance was lowered to the $185-$190 million band from $200-$210 million expected earlier.

For 2020, R&D expenses are expected in the range of $20-$25 million while SG&A expenses are anticipated in the $160-$165 million band.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -124.14% due to these changes.

VGM Scores

At this time, Acorda has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. 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, Acorda has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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