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Spectrum Pharma (SPPI) Down 0.7% Since Last Earnings Report: Can It Rebound?

Zacks Equity Research

It has been about a month since the last earnings report for Spectrum Pharmaceuticals (SPPI). Shares have lost about 0.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Spectrum Pharma due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Spectrum Pharmaceuticals’Loss Narrows in Q2

Spectrum Pharmaceuticals incurred adjusted loss of 23 cents per share in the second quarter of 2019. The loss was narrower than the Zacks Consensus Estimate of a loss of 32 cents and the year-ago quarter loss of 28 cents.

The company reported negative revenues of $1.3 million mainly from its discontinued operations. Revenues reflected sales of Evomela to a single customer under an active contract, completely offset by government chargeback claims. The company reported Evomela sales as Acrotech did not assume the particular customer, following the acquisition of Spectrum Pharma’s marketed portfolio. The Zacks Consensus Estimate for revenues was a negative $1 million.

Quarter in Detail

Adjusted research & development (R&D) expenses were $13.2 million, down 14.3% from the year-ago quarter.

Adjusted selling, general and administrative (SG&A) expense was down 0.7% to $13.7 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 13.89% due to these changes.

VGM Scores

At this time, Spectrum Pharma has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, 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 trending upward for the stock, and the magnitude of this revision has been net zero. It comes with little surprise Spectrum Pharma has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.



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