A month has gone by since the last earnings report for Aduro Biotech (ADRO). Shares have added about 7.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Aduro Biotech due for a pullback? 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.
Aduro Q3 Loss Wider Than Expected, Revenues Rise Y/Y
Aduro incurred third-quarter 2019 loss of 26 cents per share, wider than the Zacks Consensus Estimate of a loss of 23 cents but narrower than the year-ago loss of 29 cents.
Revenues came in at $4.8 million, up 54.8% year over year, primarily owing to the recognition of an upfront payment received from Eli Lilly in the first quarter of 2019. Meanwhile, sales almost came in line with the Zacks Consensus Estimate of $5 million.
Research and development expenses declined 17.1% in the reported quarter to $15.5 million owing to lower stock-based compensation and reduced headcount plus decreased costs of deprioritized programs.
General and administrative expenses were $8.7 million, down 4.4% year over year, primarily on the back of lower stock-based compensation and reduced headcount following the strategic reset announced in January this year.
Aduro had $235.4 million worth of cash, cash equivalents and marketable securities as of Sep 30, 2019 compared with $251.6 million on Jun 30, 2019.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
Currently, Aduro Biotech has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. 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.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Aduro Biotech has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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