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Why Is Denali Therapeutics Inc. (DNLI) Up 10.7% Since Last Earnings Report?

·2 min read

It has been about a month since the last earnings report for Denali Therapeutics Inc. (DNLI). Shares have added about 10.7% in that time frame, outperforming the S&P 500.

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

Denali's Q1 Earnings Miss Estimates, Revenues Up Y/Y

Denali reported a loss of 58 cents per share in the first quarter of 2021, wider than the Zacks Consensus Estimate of a loss of 37 cents per share and the year-ago quarter’s loss of 55 cents per share.

Collaboration revenues came in at $7.9 million in the first quarter, missing the Zacks Consensus Estimate of $29 million but up from $3.6 million in the year-ago quarter, primarily owing to an increase in revenues from the company’s collaboration with Takeda.

Research and development expenses were $60.2 million for the quarter under review compared with $51 million for the year-ago quarter. The upside was primarily driven by an increase in personnel-related expenses.

General and administrative expenses were $18.9 million, up from $12.6 million in the year-ago quarter due to an increase in personnel-related expenses, including stock-based compensation, primarily driven by higher headcount and additional equity award grants.


 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

At this time, Denali Therapeutics Inc. has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Denali Therapeutics Inc. has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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