Ligand (LGND) Down 15.5% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Ligand Pharmaceuticals (LGND). Shares have lost about 15.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ligand 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.
Q4 Earnings & Sales Beat Estimates
Ligand reported adjusted diluted earnings of $1.05 per share in fourth-quarter 2023 from continuing operations, beating the Zacks Consensus Estimate of 58 cents. The company reported adjusted earnings of 75 cents in the year-ago quarter.
Total revenues of $28.1 million declined 44% from the year-ago quarter’s levels. The downside was due to the absence of COVID-19-related Captisol sales during the quarter. Revenues beat the Zacks Consensus Estimate of $24.5 million.
Quarterly Highlights
Royalty revenues were up 2% year over year to $22.5 million in the fourth quarter. The upside was mainly driven by increased royalties from Amgen’s Kyprolis, Jazz Pharmaceuticals’ Rylaze and Merck’s Vaxneuvance.
Total Captisol sales were down 85% year over year to $3.9 million in the reported quarter. Ligand reports Captisol sales separately for core assets and COVID-related sales. Core Captisol sales rose 17% to $3.9 million due to the favorable timing of customer orders. During the quarter, the company did not record any Captisol sales related to COVID-19.
Contract revenues were up 16% year over year to $1.7 million in the fourth quarter, with the rise owing to the timing of partner milestone events.
Research and development (R&D) expenses fell 40% to $5.5 million due to lower employee-related expenses and lab supply expenses. General and administrative (G&A) expenses were down 49% to $16.0 million, owing to lower employee-related expenses incurred during the quarter.
Cash, cash equivalents and short-term investments amounted to $170.3 million as of Dec 31, 2023, compared with $190.5 million as of Sep 30, 2023.
Full-Year Results
Ligand reported revenues of $131.3 million for the full year, down 33% from the year-ago period.
The company’s adjusted diluted earnings from continued operations were $4.06 per share, up 66% year over year.
2024 Guidance
Ligand reiterated its guidance for 2024. Total revenues are expected to be in the range of $130-$142 million.
Royalty revenues are expected to be in the $90-$95 million range, while contract revenues are expected to be in the range of $15 million and $20 million. The company expects Captisol sales to be between $25 million and $27 million.
The company also maintained its expectation for adjusted diluted EPS to $4.25-$4.75.
This guidance excludes Captisol sales related to COVID-19 and its impact on gross profit. Management will update investors as and when orders for COVID-19-related products are received.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Ligand has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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
Ligand has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ligand is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Exact Sciences (EXAS), a stock from the same industry, has gained 18.8%. The company reported its results for the quarter ended December 2023 more than a month ago.
Exact Sciences reported revenues of $646.89 million in the last reported quarter, representing a year-over-year change of +17%. EPS of -$0.27 for the same period compares with -$0.72 a year ago.
For the current quarter, Exact Sciences is expected to post a loss of $0.50 per share, indicating a change of -19.1% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Exact Sciences. Also, the stock has a VGM Score of C.
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Ligand Pharmaceuticals Incorporated (LGND) : Free Stock Analysis Report
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