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Why Is Clovis (CLVS) Down 25.3% Since Last Earnings Report?

Zacks Equity Research

It has been about a month since the last earnings report for Clovis Oncology (CLVS). Shares have lost about 25.3% in that time frame, underperforming the S&P 500.

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

Clovis Q1 Earnings Top Estimates, Rubraca Sales Strong

Clovis incurred adjusted loss of $1.63 per share in the first quarter of 2019, narrower than the Zacks Consensus Estimate of a loss of $1.80. However, it was wider than the year-ago loss of $1.38 per share.

Net revenues, entirely from Rubraca, were approximately $33.1 million in the quarter, up 8.9% sequentially. The top line also beat the Zacks Consensus Estimate of $31.68 million. The company had recorded total revenues of $18.5 million, entirely from Rubraca sales, in the year-ago quarter.

Operating Expenses & Cash Details

Rubraca sales in the United States were $31.9 million during the quarter. The drug recorded first ever sales in ex-U.S. market of $1.2 million during the quarter.

During the first quarter, research & development expenses increased 42.5% year over year to $62 million primarily due to increased expenses for label expansion studies on Rubraca. Selling, general and administrative (SG&A) expenses escalated 21.6% year over year to $47.8 million, reflecting increased activities to support commercialization of Rubraca in the United States as well as Europe.

Cash used in operating activities in the quarter was $98.5 million, lower than $100.6 million in the year-ago quarter.

Clovis ended the quarter with $460.8 million of cash equivalents and available-for-sale securities compared with $520.1 million as of Dec 31, 2018.

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 5.16% due to these changes.

VGM Scores

At this time, Clovis 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 F on the value side, putting it in the fifth 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 looks promising. Notably, Clovis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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