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Why Is Reata Pharmaceuticals, Inc. (RETA) Up 12.2% Since Last Earnings Report?

·2 min read

It has been about a month since the last earnings report for Reata Pharmaceuticals, Inc. (RETA). Shares have added about 12.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Reata Pharmaceuticals, Inc. 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.

Reata Q2 Earnings and Revenues Beat Estimates

Reata reported second-quarter 2021 loss of $2.00 per share, narrower than the Zacks Consensus Estimate of a loss of $2.13.

However, the above loss included stock-based compensation and a non-cash interest expense. Adjusted loss for the quarter was $1.32 per share, wider than $1.23 per share recorded in the year-ago period.

Total revenues, comprising collaboration revenues, were $2.2 million compared with $3.1 million in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $1.45 million.

Operating Expenses & Cash Position

Adjusted research and development expenses rose 18.7% year over year to $34.8 million due to increased clinical study activities.

General and administrative expenses were $14.1 million, up 50.2% from the year-ago period due to increased commercial launch readiness activities and higher personnel cost.

The company had cash and cash equivalents of $755.7 million as of Jun 30, 2021 compared with $777.6 million as of Mar 31, 2021. The company expects its cash resources to fund operations through mid-2024.

How Have Estimates Been Moving Since Then?

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

VGM Scores

Currently, Reata Pharmaceuticals, Inc. 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.

Outlook

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


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