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Clovis (CLVS) Down 5.3% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Clovis Oncology (CLVS). Shares have lost about 5.3% 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 Q1 Earnings Beat Estimates, Revenues Miss

Clovis incurred loss of 64 cents per share for the first quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of 72 and the year-ago loss of $1.39 per share.

Net revenues, entirely from Clovis’ only marketed drug, Rubraca, were down 10.6% year over year to $38.1 million in the quarter, missing the Zacks Consensus Estimate of $44.8 million.

Quarter in Details

Sales of Rubracain the United States were $31.7 million, down 19.3% year over year. Product sales were down due to lower new patient starts amid the pandemic. However, the company expects sales to normalize starting from the second quarter and improve in the second half of 2021.

Ex-U.S. market sales were $6.4 million in the first quarter compared with $3.3 million in the year-ago quarter.

In the first quarter, research & development expenses decreased 23% year over year to $52.8 million, primarily due to lower spending on Rubraca clinical studies. Selling, general and administrative expenses declined 29.8% year over year to $22.9 million, driven by cost-saving initiatives and savings due to the COVID-19 situation globally.

Clovis ended the quarter with $190.9 million of cash equivalents and available-for-sale securities compared with $240.2 million as of Dec 31, 2020.

The company expects its cash resources, along with anticipated revenues and available financing sources, to be enough to support its operations till early 2023.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 18.57% due to these changes.

VGM Scores

Currently, Clovis has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been 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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