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Why Is Achillion (ACHN) Up 24.7% Since Last Earnings Report?

Zacks Equity Research
Is (WM) Outperforming Other Business Services Stocks This Year?

A month has gone by since the last earnings report for Achillion Pharmaceuticals (ACHN). Shares have added about 24.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Achillion due for a pullback? 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 catalysts. <p style="text-align: justify;"><strong>Achillion Reports Narrower-Than-Expected Q2 Loss</strong></p><p style="text-align: justify;">Achillion reported a loss of 12 cents per share for the second quarter of 2018, narrower than the year-ago loss of 16 cents as well as the Zacks Consensus Estimate of a loss of 13 cents.</p><p style="text-align: justify;">The company generated no revenues in the reported quarter.</p><p style="text-align: justify;">Research and development (R&D) expenses decreased nearly 37.6% from the year-ago period to $11.4 million. The decrease was due to decreased stock-based compensation, lower personnel costs, lower manufacturing and formulation expenses for ACH-5228 and discovery costs related intravitreal factor D inhibitors. This was partially offset by increased costs related to clinical studies of ACH-4471 and ACH-5228 and preclinical costs of ACH-5548.</p><p style="text-align: justify;">General and administrative (G&A) expenses increased 32.3% year over year to $7.1 million due to increased personnel cost and stock-based compensation relatedto transition of chief executive office, partially offset by lower consulting fees.<br /> </p>

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

At this time, Achillion has a subpar Growth Score of D, though it is lagging a bit 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 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

Achillion has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.



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