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Clovis (CLVS) Down 17.3% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Clovis Oncology (CLVS). Shares have lost about 17.3% in that time frame, underperforming the S&P 500.

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

Clovis Q2 Earnings and Revenues Miss Estimates

Clovis incurred loss of $1.11 per share in the second quarter of 2020, wider than the Zacks Consensus Estimate of a loss of $1.02 but narrower than the year-ago loss of $1.63 per share.

Net revenues, entirely from Rubraca, were up almost 21% year over year to $39.9 million in the quarter. However, revenues missed the Zacks Consensus Estimate of $44.65 million. Total sales of Rubraca were down 6.3% 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 Rubraca in the United States were $36.7 million, compared with $32.7 million in the second quarter of 2019. Ex-U.S. market sales were $3.2 million in the second quarter compared with $3.3 million in the first quarter of 2020.

In the second quarter, research & development expenses decreased 1.1% year over year to $69.9 million. Selling, general and administrative expenses declined 12.7% year over year to $41.9 million, driven by cost-saving initiatives and savings due to the COVID-19 situation globally.

Clovis ended the quarter with $261.4 million of cash equivalents and available-for-sale securities compared with $228.4 million as of Mar 31, 2020. The increase was led by net proceeds of $82.8 million through an equity offering in May.

The company expects its cash resources to be enough to support its operations into early 2022.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

At this time, Clovis has an average Growth Score of C, though it is lagging a lot 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 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

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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