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Mirati (MRTX) Up 5.3% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Mirati (MRTX). Shares have added about 5.3% in that time frame, outperforming the S&P 500.

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

Mirati Q2 Loss Narrower Than Expected, Sales Beat

Mirati reported a loss of $3.18 per share in second-quarter 2022, narrower than the Zacks Consensus Estimate of a loss of $3.53 and the year-ago quarter’s loss of $3.23.

Mirati reported $5.4 million as collaboration revenues for the second quarter, beating the Zacks Consensus Estimate of $2.2 million in revenues. Management did not record any revenues in the year-ago quarter.

Quarter in Detail

Research and development expenses were down 4.6% year over year to $128.3 million due to a decrease in manufacturing costs following the FDA filing for adagrasib last year.

General and administrative expenses surged 83.1% year over year to $54.2 million due to an increase in commercial readiness costs. The company incurred these costs as management started making preparations for a potential product launch for adagrasib in NSCLC, anticipating the FDA’s approval.

Cash, cash equivalents and short-term investments as of Jun 30, 2022, were $1.2 billion compared with $1.3 billion as of Mar 31, 2022.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

Currently, Mirati has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, 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

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Mirati 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

Mirati is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Sarepta Therapeutics (SRPT), a stock from the same industry, has gained 8.5%. The company reported its results for the quarter ended June 2022 more than a month ago.

Sarepta Therapeutics reported revenues of $233.49 million in the last reported quarter, representing a year-over-year change of +42.3%. EPS of -$2.65 for the same period compares with -$1.02 a year ago.

For the current quarter, Sarepta Therapeutics is expected to post a loss of $1.36 per share, indicating a change of -126.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -4.6% over the last 30 days.

Sarepta Therapeutics has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.


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