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Inovio (INO) Up 14.3% Since Last Earnings Report: Can It Continue?

Zacks Equity Research

It has been about a month since the last earnings report for Inovio Pharmaceuticals (INO). Shares have added about 14.3% in that time frame, outperforming the S&P 500.

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

Inovio Q3 Loss In Line, Sales Lag, VGX-3100 in Focus

Inovio’s adjusted loss of 27 cents per share in third-quarter 2019 was in line with the Zacks Consensus Estimate.

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Adjusted loss in the quarter excludes the impact of change in fair value of derivative liability and loss on investments in affiliated entities. However, including this impact, Inovio’s loss of 25 cents in the third quarter narrowed from the prior-year loss of 27 cents.

Revenues in the reported quarter were $0.9 million, down from the year-earlier quarter’s $2 million. This year-over-year decrease was primarily due to lower reimbursement from AstraZeneca in relation to drug manufacturing activities. Sales also missed the Zacks Consensus Estimate of $3 million.

Quarter in Detail

Research and development expenses were $19.1 million in the third quarter, down 12.8% year over year, mainly due to lower employee compensation and drug manufacturing expenses.

General and administrative expenses decreased 16.2% to $5.7 million in the quarter owing to lower allocated depreciation expense and legal expenses.

Inovio had $93.8 million worth of cash, cash equivalents and short-term investments as of Sep 30, 2019 compared with $106 million on Jun 30, 2019.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -34.62% due to these changes.

VGM Scores

Currently, Inovio 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

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


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Zacks Investment Research