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Why Is Editas (EDIT) Down 19.5% Since Last Earnings Report?

Zacks Equity Research
·2-min read

It has been about a month since the last earnings report for Editas Medicine (EDIT). Shares have lost about 19.5% 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 its most recent earnings report in order to get a better handle on the important drivers.

Editas' Loss Narrows in Q2, Revenues Trump Estimates

Editas incurred a loss of 78 cents per share in the second quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 84 cents. The company had reported a loss of 81 cents per share in the year-ago quarter.

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Collaboration, and other research and development revenues, comprising the company’s top line, came in at $6.4 million in the reported quarter compared with $0.4 million in the year-ago quarter. Revenues in the second quarter grew significantly, owing to additional programs licensed by Bristol Myers Squibb. The top line also beat the Zacks Consensus Estimate of $5 million.

Quarter in Detail

In the second quarter of 2022, research and development expenses were $43.7 million, up 29.3% from the year-ago figure, owing to higher expenses related to clinical studies.

General and administrative expenses decreased 23.1% to $16.9 million, owing to performance awards granted in 2021, while no similar expenses were recorded in the second quarter of 2022.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

Currently, Editas has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% 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 upward for the stock, and the magnitude of these revisions has been net zero. Notably, Editas 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