It has been about a month since the last earnings report for Medicines Co. (MDCO). Shares have lost about 11% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Medicines Co. 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.
Medicines Company’s Q3 Loss Widens, Revenues Miss
The Medicines Company incurred third-quarter 2018 loss of 70 cents per share, wider than the Zacks Consensus Estimate of a loss of 48 cents. However, the loss was narrower than the year-ago loss of 82 cents per share.
In third-quarter 2018, the company reported negative revenues of $3.3 million compared with the prior-year quarter’s figure of $7.9 million. Also, the top line missed the Zacks Consensus Estimate of $4 million. The negative revenues can be attributed to changes in estimated net sales reserves and returns related to the sale of the company’s Angiomax brand plus full-authorized generic rights to partner Sandoz, Inc. The divestiture was part of Medicines Company’s restructuring activities and efforts to streamline assets to focus solely on the development of its late-stage candidate, inclisiran.
Research and development (R&D) expenses decreased 1% year over year to $32.7 million.
Adjusted selling, general and administrative expenses (SG&A) were down 58% year over year to $11 million in the reported quarter.
Medicines Company had $118.7 million in cash and cash equivalents as of Sep 30, 2018 compared with $162.5 million on Jun 30, 2018.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -26.37% due to these changes.
At this time, Medicines Co. 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 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.
Medicines Co. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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