Why Is Endo (ENDP) Up 4.6% Since Last Earnings Report?
It has been about a month since the last earnings report for Endo International (ENDP). Shares have added about 4.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Endo 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.
Endo Surpasses Q4 Earnings and Revenue Estimates
Endo’s fourth-quarter earnings of 84 cents per share beat the Zacks Consensus Estimate of 70 cents and increased from 75 cents in the year-ago quarter.
Revenues came in at $789 million in the fourth quarter, surpassing the Zacks Consensus Estimate of $743 million. Revenues rose 4% from the year-ago quarter due to increased revenues from the Branded, Generic and International Pharmaceuticals segments.
Quarterly Highlights
Endo has four reportable business segments — Branded Pharmaceuticals, Generic Pharmaceuticals, Sterile Injectables and International Pharmaceuticals.
Branded Pharmaceuticals’ revenues were $228 million compared with $225 million in the year-ago quarter. Within the segment, Specialty Products revenues increased 4% to $161 million. Sales of Xiaflex increased 14% to $120 million, driven by higher net price and improving patient demand compared to the prior year. However, Established Products revenues decreased 5% to $67 million due to competitive pressure.
Sterile Injectables’ revenues came in at $319 million, down 4% year over year due to competitive pressure on certain products, partially offset by higher Vasostrict revenues primarily due to hospitalizations associated with COVID-19.
Generic Pharmaceuticals reported sales of $218 million in the quarter, up 21% due to additional revenues from the 2021 product launches, including lubiprostone capsules, the first authorized generic of Amitiza and varenicline tablets, the only FDA-approved generic version of Chantix.
International Pharmaceuticals revenues came in at $24 million, up from $23 million.
2021 Results
Revenues increased 3% in 2021 to $3 billion. Earnings per share came in at $3.03 compared with $2.87 per share in 2020.
Q1 2022 Guidance
Endo provided financial guidance only for the first quarter due to uncertainties in certain key assumptions, including the timing and impact of Vasostrict generic competition and the rate and extent to which the market for specialty product office-based procedures recovers from the current COVID-19 driven challenges.
Revenues for the first quarter are projected within $595-$635 million. Adjusted earnings per share are estimated to be in the range of 35 cents to 45 cents.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -11.7% due to these changes.
VGM Scores
Currently, Endo has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 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 downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Endo has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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