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Arena Pharmaceuticals, Inc. (ARNA) Down 12.2% Since Last Earnings Report: Can It Rebound?

·2 min read

A month has gone by since the last earnings report for Arena Pharmaceuticals, Inc. (ARNA). Shares have lost about 12.2% in that time frame, underperforming the S&P 500.

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

Arena Pharmaceuticals Q4 Earnings Miss, Revenues Nil

Arena Pharmaceuticals incurred a loss of $2.10 per share in the fourth quarter of 2020, wider than the Zacks Consensus Estimate of a loss of $1.97. The company had incurred loss of $1.76 in the year-ago quarter.

Arena recorded no revenues in the reported quarter. The company had recorded revenues of $3 million in the year-ago quarter.

Quarterly Details

Research & development (R&D) expenses escalated 34.6% from the prior-year level to $100.4 million, primarily as a result of the progress of its pipeline candidates to the next phase of clinical development, including phase III development program of etrasimod.

Selling, general and administrative expenses increased 57.2% from the year-ago figure to $34.9 million.

The company ended the quarter with approximately $1.1 billion in cash, cash equivalents and investments balance compared with $1.2 billion as of Sep 30, 2020.

Full-Year Results

Arena reported revenues of $0.3 million compared with $806.4 million in the year-ago period. The company incurred a loss of $7.39 per share against earnings of $7.99 per share in the year-ago period.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -7.36% due to these changes.

VGM Scores

Currently, Arena Pharmaceuticals, Inc. has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, 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 downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Arena 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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