Why Is Editas (EDIT) Down 21% Since Last Earnings Report?
A month has gone by since the last earnings report for Editas Medicine (EDIT). Shares have lost about 21% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Editas 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 drivers.
Editas’ Q4 Earnings Miss Estimates, Pipeline in Focus
Editas Medicine, Inc.incurred a loss of 88 cents per share in the fourth quarter of 2022, wider than the Zacks Consensus Estimate of a loss of 84 cents. The company had reported a loss of 61 cents per share in the year-ago quarter.
Collaboration and other research and development revenues, which comprise the company’s top line, were $6.5 million in the reported quarter, down from $12.5 million reported in the year-ago quarter. The Zacks Consensus Estimate for revenues was $5 million.
The company has a collaboration agreement with Bristol-Myers.The company is advancing alpha-beta T-cell experimental medicines for the treatment of solid and liquid tumors in collaboration with Bristol-Myers through its wholly-owned subsidiary, Juno Therapeutics, Inc.
In the fourth quarter of 2022, research and development expenses were $52 million, up from the year-ago figure of $37.5 million, owing to increased clinical and manufacturing investments in the company’s EDIT-301 program and a one-time charge incurred as part of the company pausing internal investment in EDIT-101.
General and administrative expenses were $17.9 million in the fourth quarter, up 8.8% year over year.
Editas had cash, cash equivalents and investments worth $437.4 million as of Dec 31, 2022, compared with $478.5 million as of Sep 30, 2022. Editas expects that its existing cash, cash equivalents and marketable securities will fund operating expenses and capital expenditures into 2025.
Editas generated total revenues of $20 million in 2022 compared with $26 million recorded in 2021.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted 54.83% due to these changes.
VGM Scores
Currently, Editas has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the fifth 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 looks promising. Notably, Editas has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Editas is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Blueprint Medicines (BPMC), a stock from the same industry, has gained 4.9%. The company reported its results for the quarter ended December 2022 more than a month ago.
Blueprint Medicines reported revenues of $38.78 million in the last reported quarter, representing a year-over-year change of -63.8%. EPS of -$2.65 for the same period compares with -$0.99 a year ago.
Blueprint Medicines is expected to post a loss of $2.58 per share for the current quarter, representing a year-over-year change of -44.1%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Blueprint Medicines. Also, the stock has a VGM Score of F.
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Editas Medicine, Inc. (EDIT) : Free Stock Analysis Report
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