Alkermes (ALKS) Up 21.6% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Alkermes (ALKS). Shares have added about 21.6% in that time frame, outperforming the S&P 500.

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

Alkermes' Earnings and Revenues Beat Q1 Estimates

Alkermes reported adjusted earnings of 1 cent per share for the first quarter of 2020 against a loss of 17 cents in the year-ago quarter. It also beat the Zacks Consensus Estimate of a loss of 8 cents.

The company’s revenues of $246.2 million increased 10.4% from the year-ago quarter. The top line beat the Zacks Consensus Estimate of $225.02 million. The company’s proprietary products — Vivitrol and Aristada — drove revenues.

Quarter Details

Total manufacturing and royalty revenues were up 6.8% year over year to $116.3 million.  Manufacturing and royalty revenues from J&J’s (JNJ) drugs — Risperdal Consta, Invega Sustenna/Xeplion and InvegaTrinza/Trevicta — were $82.2 million, up 8.7% year over year.

Vivitrol sales improved about 13.9% year over year to $78.8 million.

Aristada sales came in at $51 million, up 68.3% year over year.

Research and development expenses were $93.3 million, down 9.1% year over year.

Selling, general and administrative expenses were $133.4 million, down 5.5% year over year.

2020 Guidance Withdrawn

The company withdrew its financial expectations for 2020 provided in February due to uncertainties regarding the impact of the COVID-19 pandemic. The company is unable to reliably estimate the future impact of COVID-19 and stated that extent of the impact will be driven primarily by the severity and duration of the pandemic.

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 -114.29% due to these changes.

VGM Scores

Currently, Alkermes has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, 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.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision has been net zero. Notably, Alkermes has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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