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Why Is Momenta (MNTA) Up 86.9% Since Last Earnings Report?

·3 min read

A month has gone by since the last earnings report for Momenta Pharmaceuticals (MNTA). Shares have added about 86.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Momenta due for a pullback? 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.

Momenta Reports Wider-Than-Expected Q2 Loss

Momenta reported a loss of 48 cents per share in the quarter, wider than the Zacks Consensus Estimate of a loss of 42 cents but narrower than the year-ago quarter’s loss of $1.16.

Revenues in the quarter came in at $6.6 million, up from the year-ago quarter’s $5.2 million. The figure beat the Zacks Consensus Estimate of $6 million.

Quarter in Detail

Momenta’s top line comprises product revenues of $6.6 million from Sandoz’s sales of Glatopa, a generic version of Copaxone (20 mg), which increased from $3.3 million in the year-ago quarter due to increase in sales volume.

Research and development revenues came in at $0.2 million compared with the year-ago quarter’s $1.8 million.

Research and development expenses came in at $38.8 million, flaring up from the $32.1 million incurred in the year-ago quarter due to a rise in manufacturing and clinical trial costs for nipocalimab and M254, and increased spending on M710.

General and administrative expenses came in at $25.4 million, down from $46.6 million in the year-ago quarter.

2020 Financial Guidance

Due to lower clinical trial enrollment trends as a result of the COVID-19 pandemic, Momenta anticipates its operating expenses to be around $200-$220 million.

 

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -10.59% due to these changes.

VGM Scores

At this time, Momenta has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Momenta has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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