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Why Is Endo (ENDP) Down 16.8% Since Last Earnings Report?

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Zacks Equity Research
·3 min read
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A month has gone by since the last earnings report for Endo International (ENDP). Shares have lost about 16.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Endo due for a breakout? 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 drivers.

Endo's Earnings & Revenues Surpass Estimates in Q4

The company’s earnings of 75 cents easily beat the Zacks Consensus Estimate of 50 cents in the reported quarter but decreased from 80 cents in the year-ago quarter.

Revenues came in at $760 million in the fourth quarter, surpassing the Zacks Consensus Estimate of $654 million but was down 1% from the year-ago quarter. The decline was attributed to lower Generic Pharmaceuticals segment’s revenues.

Quarterly Highlights

Endo has four reportable business segments — Branded Pharmaceuticals, Generic Pharmaceuticals, Sterile Injectables and International Pharmaceuticals.

Branded Pharmaceuticals revenues were $224.5 million compared to $225.5 million in the year-ago quarter. Within the segment, Specialty Products revenues increased 4% to $154 million. Sales of Xiaflex increased 4% to $105 million. However, Established Products revenues decreased 8% to $71 million.

Sterile Injectables revenues came in at $332 million, up 16% year over year primarily driven by higher Vasostrict revenues.

Generic Pharmaceuticals reported sales of $180 million in the quarter, down 20% due to continued competitive pressures on certain key products.

International Pharmaceuticals revenues came in at $23 million, down 18% year over year.

2020 Results

Revenues in 2020 came in at $2.9 billion, declining slightly from $2.91 billion in 2019 but easily beating the Zacks Consensus Estimate of $2.80 billion.

Earnings per share of $2.87 grew from $2.66 in 2019 and easily beat the Zacks Consensus Estimate of $2.60 per share.

2021 Guidance

Endo expects revenues of $620-$680 million and earnings per share of $0.40-$0.50 in the first quarter. Revenues for 2021 are projected to be $2.55-$2.79 billion. Adjusted earnings per share are now estimated to be $1.80-$2.30.


 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -9.75% due to these changes.

VGM Scores

Currently, Endo has a subpar Growth Score of D, though it is lagging a bit 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 quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. 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. Notably, Endo has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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