It has been about a month since the last earnings report for Medicines Co. (MDCO). Shares have added about 17.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Medicines Co. 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 drivers.
Medicines Company’s Q1 Loss Narrows, Revenues Nil
The Medicines Company incurred first-quarter 2019 adjusted loss of 62 cents per share, narrower than the Zacks Consensus Estimate of a loss of 64 cents and the year-ago loss of 76 cents.
In first-quarter 2019, the Medicines Company did not generate any revenues. The Zacks Consensus Estimate for the metric was pegged at $4.37 million. However, in the prior-year quarter, the company’s revenues had grossed $7.8 million.
Adjusted selling, general and administrative expenses (SG&A) were down 27% year over year to $13.1 million in the reported quarter. Adjusted research and development expenses (R&D) declined 32.4% to $26.4 million.
The Medicines Company’s cash and cash equivalents as of Mar 31, 2019 totaled $199.7 million compared with $238.3 million on Dec 31, 2018. The company believes that this existing cash balance will enable it to fund operating expenses through 2020.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -8.96% due to these changes.
Currently, Medicines Co. has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Medicines Co. has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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