It has been about a month since the last earnings report for Editas Medicine (EDIT). Shares have lost about 36.5% 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.
Editasincurred a loss of 75 cents per share in the third quarter of 2024, narrower than the Zacks Consensus Estimate of a loss of 76 cents. The company had reported a loss of 55 cents per share in the year-ago quarter.
Collaboration and other research and development (R&D) revenues, which comprise the company’s top line, were $0.1 million in the reported quarter, down from $5.3 million reported in the year-ago quarter. The reported figure missed the Zacks Consensus Estimate of $7 million. The year-over-year decline in revenues can be attributed to an upfront payment received in the year-ago quarter for a non-exclusive license grant to Vor Bio.
In the third quarter of 2024, R&D expenses increased 18% to $47.6 million compared with $40.5 million reported in the year-ago period. The uptick in R&D expenses can be attributed to higher clinical and manufacturing costs related to the accelerated progression of Editas’ reni-cel program as well as costs attributable to in vivo research and discovery.
General and administrative expenses were $18.1 million in the reported quarter, up 21% year over year, due to increased employee-related expenses because of a higher headcount to support business operations for progressing the reni-cel program.
Editas had cash, cash equivalents and investments worth $265.1 million as of Sept. 30, 2024, down from $318.3 million as of June 30, 2024. The company expects its existing cash, cash equivalents and marketable securities, together with the upfront cash payment from DRI and the retained portions of the payments payable under the license agreement with Vertex Pharmaceuticals, to fund operating expenses and capital expenditure into the second quarter of 2026.
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 52.51% due to these changes.
At this time, 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 D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward 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.
Editas is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Exelixis (EXEL), a stock from the same industry, has gained 1.4%. The company reported its results for the quarter ended September 2024 more than a month ago.
Exelixis reported revenues of $539.54 million in the last reported quarter, representing a year-over-year change of +14.3%. EPS of $0.47 for the same period compares with $0.10 a year ago.
Exelixis is expected to post earnings of $0.46 per share for the current quarter, representing a year-over-year change of +39.4%. Over the last 30 days, the Zacks Consensus Estimate has changed +1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Exelixis. Also, the stock has a VGM Score of A.
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