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OPKO Health (OPK) Up 16.4% Since Last Earnings Report: Can It Continue?

Zacks Equity Research
·3 min read

A month has gone by since the last earnings report for OPKO Health (OPK). Shares have added about 16.4% in that time frame, outperforming the S&P 500.

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

OPKO Health Reports Q1 Loss, Lags Revenue Estimates

OPKO Health, Inc.incurred adjusted loss of 9 cents per share in first-quarter 2020, in line with the Zacks Consensus Estimate. Notably, the company had reported a loss of 14 cents in the prior-year quarter.

First-quarter revenues of the company totaled $211.5 million, which missed the Zacks Consensus Estimate by 2.1%. Also, the top line declined 4.9% on a year-over-year basis.

Segmental Revenues in Q1

Revenues from Services grossed $170.8 million in the reported quarter, down 4.5% year over year. The decline can be attributed to COVID-19 as lockdowns resulted in a substantial decline in the company’s routine and genetic testing businesses since the beginning of March.

Revenues from Products rose 22.9% to $31.1 million. Per management, revenues from products include $9.9-million contributions from RAYALDEE.
Revenues from Transfer of intellectual property came in at $9.6 million, plunging 47.5% year over year.

Per management, total RAYALDEE prescriptions reported by IQVIA improved 78% year over year in the first quarter. Further, the open-label Phase 2 trial for RAYALDEE in hemodialysis patients is on track to complete enrollment in third-quarter 2020 with full top-line data anticipated in first-quarter 2021.

Margin Analysis

Gross profit in the reported quarter came in at $71.2 million, down 9.3% from the prior-year quarter. Gross margin was 33.7% of net revenues, down 4160 basis points (bps) year over year.

Selling, general and administrative expenses totaled $76.1 million, down 20.1% year over year. Research and development expenses amounted to $21.8 million, down 40.3% year over year.

Operating loss in the first quarter was $40.7 million, noticeably narrower than the year-ago quarter’s loss of $75.3 million.

Financial Update

The company exited the first quarter with cash, cash equivalents and marketable securities of $34.5 million, compared with $85.5 million at the year-end 2019.

Net cash used in operating activities for the three months ended Mar 31, 2020, came in at $43.4 million, narrower than $48.9 million in the year-ago period.


In the quarter under review, OPKO Health did not issue any guidance.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 7.41% due to these changes.

VGM Scores

Currently, OPKO Health has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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.


Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise OPKO Health has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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