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Why Is Mirati (MRTX) Down 2.2% Since Last Earnings Report?

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It has been about a month since the last earnings report for Mirati (MRTX). Shares have lost about 2.2% in that time frame, underperforming the S&P 500.

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

Mirati’s Earnings & Revenues Beat Estimates in Q3

Mirati incurred a loss of $1.96 per share in the third quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of $2.04 but wider than the year-ago quarter’s loss of $1.38.

The company generated $11.4 million as license and collaboration revenues in the third quarter owing to the agreement with ORIC Pharmaceuticals. The top line surpassed the Zacks Consensus Estimate of $1 million.

Quarter in Detail

General and administrative expenses jumped 88.8% to $20.2 million due to higher share-based compensation expense and employee-related costs in the quarter. Research & development expenses also surged 68.6% to $79.9 million due to higher costs related to pipeline development and higher salary costs.

The company ended the September quarter with $579.1 million in cash and cash equivalents compared with $645.7 million as of Jun 30, 2020.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

Currently, Mirati has a poor Growth Score of F, 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 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

Mirati has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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