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Clovis (CLVS) Up 18.6% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Clovis Oncology (CLVS). Shares have added about 18.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Clovis 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 catalysts.

Clovis Q3 Earnings Beat Estimates, Revenues Miss

Clovis incurred loss of 89 cents per share for the third quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of $1.01 and the year-ago loss of $1.72 per share.

Net revenues, entirely from Clovis’ only marketed drug, Rubraca, were up almost 3.1% year over year to $38.8 million in the quarter. However, revenues missed the Zacks Consensus Estimate of $42.34 million. Total sales of Rubraca also declined 2.8% sequentially due to fewer new patient starts amid coronavirus related stay-in-home and other travel restrictions. The company stated that the COVID-19 related situation remains uncertain and it is difficult to predict future sales of the drug.

Quarter in Details

Sales of Rubracain the United States were $33.9 million, compared with $37.6 million in the third quarter of 2019. Ex-U.S. market sales were $4.9 million in the third quarter compared with $1.1 million in the year-ago quarter.

In the third quarter, research & development expenses decreased 19.3% year over year to $62.9 million, primarily due to lower spending on Rubraca clinical studies. Selling, general and administrative expenses declined 7.7% year over year to $38.6 million, driven by cost-saving initiatives and savings due to the COVID-19 situation globally.

Clovis ended the quarter with $224.7 million of cash equivalents and available-for-sale securities compared with $261.4 million as of Jun 30, 2020.

The company expects its cash resources, along with anticipated revenues and available financing sources, to be enough to support its operations in early 2022.

Fourth Quarter 2020 Guidance

The company’s guided range for Rubraca sales in the fourth quarter 2020 of $38-$40 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 11.98% due to these changes.

VGM Scores

At this time, Clovis has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, 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 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Clovis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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