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Repligen (RGEN) Up 3.6% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Repligen (RGEN). Shares have added about 3.6% in that time frame, outperforming the S&P 500.

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

Repligen’s Earnings and Sales Surpass Q1 Estimates

Repligen announced first-quarter 2022 adjusted earnings per share of 92 cents, beating the Zacks Consensus Estimate of 72 cents. Earnings also rose 35.3% year over year.

Total revenues of $206.4 million also surpassed the Zacks Consensus Estimate of $183.6 million. Sales rose 45% year over year (48% in constant currency) on robust demand across the filtration, chromatography and process analytics franchises.

Excluding the impact of currency and acquisitions/divestitures, Repligen’s organic revenues grew 44% year over year for first-quarter 2022.

Quarter in Detail

During the quarter, Repligen’s base business accounted for 71% of revenues while COVID-related sales constituted 26%. Remaining growth was on account of inorganic revenues from the acquisitions made during 2021.

We note that Repligen’s base business can be categorized mainly under four franchises, namely filtration, chromatography, protein and process analytics.

Sales of the company’s overall base business registered growth of 37% year over year. Revenue growth from the filtration, chromatography and process analytics franchises was up over 30% year over year. Revenue growth of the protein franchise was in line with the year-ago quarter’s level.

The gene-therapy business was up more than 100% during the quarter.

Adjusted gross margin was 60.4% in the first quarter, up 100 basis points (bps) year over year.

For the reported quarter, adjusted research and development expenses were $11.8 million, up 60.1% from the year-ago quarter’s figure.

Adjusted selling, general and administrative expenses were $45.4 million, surging 43.2% year over year.

Adjusted operating income was $67.4 million, increasing 47% year over year. Adjusted operating margin was 32.6%, up 70 bps year over year.

As of Mar 31, 2022, Repligen had cash and cash equivalents worth $584.6 million compared with $603.8 million on Dec 31, 2021.

2022 Guidance Updated

Repligen revised its financial guidance for 2022.

RGEN expects revenues in the range of $770-$800 million, indicating a 4% reduction from the earlier projected levels of $800-$830 million. The new revenue guidance indicates overall revenue growth of 15-19% year over year on a reported basis and 17-21% growth on constant-currency basis. Organic growth is now expected in the range of 14-18%, down from the earlier projected growth band of 18-22%.

Repligen now expects base business revenues in the $598-$628 million range, up from the previously issued guided range of $578-$587 million.

The updated guidance lowers Repligen’s expectations from COVID-related sales due to slowing vaccination rates. However, RGEN expects a rise in demand for products sold under its base business.

Adjusted net income is now projected in the $177-$182 million band, down from the earlier guidance of $185-$190 million. Adjusted operating income is now anticipated within $225-$231 million, down from the earlier projected $234-$240 million band.

Adjusted EPS is anticipated within $3.07-$3.15, reflecting a decline from the earlier guidance range of $3.21-$3.30.

 

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 -7.17% due to these changes.

VGM Scores

At this time, Repligen has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, 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.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Repligen has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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