It has been about a month since the last earnings report for OPKO Health (OPK). Shares have lost about 6.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is OPKO Health due for a breakout? 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 catalysts.
OPKO Health Reports Loss in Q1, Misses Revenue Estimates
OPKO Health, Inc. incurred adjusted loss of 14 cents per share in first-quarter 2019, wider than the Zacks Consensus Estimate of a loss of 7 cents. The company had incurred a loss of 8 cents per share in the year-ago quarter.
Revenues totaled $222.5 million, which missed the Zacks Consensus Estimate by 9.9%. Further, the top line decreased 12.9% on a year-over-year basis.
Segment Revenues in Q1
Revenues from Services grossed $178.9 million in the reported quarter, down 15.3% year over year.
Revenues from Products decreased 9.3% to $25.3 million. Per management, revenues from products include $5.8 million contributions from RAYALDEE.
Revenues from Transfer of intellectual property came in at $18.3 million, up 16.6% year over year.
Per management, total RAYALDEE prescriptions reported by IQVIA improved 121% year over year in the first quarter. Further, management at OPKO Health announced that RAYALDEE marketing authorization applications filed by Vifor Fresenius have been accepted for review in several European countries.
Gross profit in the reported quarter came in at $78.5 million, down 22.1% from the prior-year quarter. Gross margin was 35.3% of net revenues, down 420 bps year over year.
Selling, general and administrative expenses totaled $95.2 million, up 4% year over year. Research and development expenses amounted to $36.5 million, up 10.9% year over year.
Operating loss in the first quarter was $75.3 million, wider than the year-ago quarter’s loss of $42.6 million.
For the second quarter of 2019, management expects revenues from Services between $170 million and $180 million.
Product revenues are expected within $27-$29 million, including revenues for RAYALDEE between $6.5 million and $7 million.
Revenues from Transfer of intellectual property are anticipated in the band of $17 million to $22 million.
OPKO Health expects costs and expenses to be between $280 million and $290 million, including research and development expenses of $38-$43 million in the second quarter.
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 -133.33% due to these changes.
At this time, OPKO Health has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, 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.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise OPKO Health has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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