Nektar (NKTR) Up 4% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Nektar Therapeutics (NKTR). Shares have added about 4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Nektar 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.
Nektar Incurs Wider-Than-Expected Q3 Loss, Beats on Revenues
Nektar reported an adjusted loss of 19 cents per share for the third quarter of 2023, which was wider than the Zacks Consensus Estimate of a loss of 18 cents. In the year-ago quarter, the loss was 24 cents per share.
Total revenues increased 2.1% year over year to $24.1 million during the third quarter. Revenues beat the Zacks Consensus Estimate of $21 million.
Quarter in Detail
In the third quarter, product sales increased around 16% from the year-ago quarter’s levels to $5.8 million. Product revenues beat our model estimate of $3.5 million.
Non-cash royalty revenues were $18.2 million, down 0.5% from the year-ago quarter. Non-cash royalty revenues were better than our model estimate of $16.4 million.
License, collaboration and other revenues were $0.2 million in the reported quarter compared with $0.3 million reported in the year-ago quarter.
Research and development (R&D) expenses declined 28.5% to $24 million due to the winding down of the development of bempegaldesleukin (bempeg).
General and administrative (G&A) expenses declined 6.2% year over year to $21.1 million due to the discontinuation of the development of bempeg.
Cash and investments in marketable securities as of Sep 30, 2023 were $372.7 million compared with $409.4 million as of Jun 30, 2023.
2023 Guidance
Nektar continues to expect revenues in the range of $80-$90 million, which includes $65-$70 million in non-cash royalties and $15-$20 million in product sales.
R&D costs are expected to range between $105 million and $115 million, unchanged from the previous expectation. G&A costs are now expected to be between $80 million and $85 million compared with the earlier projection of $75-$80 million. Nektar expects to end 2023 with at least $320 million in cash and investments, higher than the prior projection of $315 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -53.16% due to these changes.
VGM Scores
Currently, Nektar has a nice Growth Score of B, 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 fifth 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Nektar 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
Nektar is part of the Zacks Medical - Drugs industry. Over the past month, Corcept Therapeutics (CORT), a stock from the same industry, has gained 5%. The company reported its results for the quarter ended September 2023 more than a month ago.
Corcept reported revenues of $123.6 million in the last reported quarter, representing a year-over-year change of +21.5%. EPS of $0.28 for the same period compares with $0.30 a year ago.
For the current quarter, Corcept is expected to post earnings of $0.25 per share, indicating a change of +78.6% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.7% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Corcept. Also, the stock has a VGM Score of B.
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