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Why Is Nektar (NKTR) Down 19.7% Since Last Earnings Report?

It has been about a month since the last earnings report for Nektar Therapeutics (NKTR). Shares have lost about 19.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Nektar 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 catalysts.

Nektar Therapeutics Q1 Earnings & Revenues Beat

Nektar Therapeutics reported a first-quarter 2023 loss (excluding non-cash goodwill and other impairment charges) of 25 cents per share, narrower than the Zacks Consensus Estimate of a loss of 26 cents. The company reported a loss of 49 cents per share in the year-ago quarter.

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Revenues declined 13% year over year to $21.6 million during the quarter. The top line beat the Zacks Consensus Estimate of $20.6 million.

Quarter in Detail

Product sales declined 17% from the year-ago quarter’s level to $4.7 million. Non-cash royalty revenues amounted to $16.9 million, down 4% year over year.

License, collaboration and other revenues totaled $0.02 million compared with $1.57 million a year ago.

Research and development expenses declined 71.5% to $30.5 million due to the winding down of bempeg’s development.

General and administrative expenses went down 22.7% year over year to $21.1 million. This was also due to the discontinuation of the development of bempeg.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -22.4% due to these changes.

VGM Scores

Currently, Nektar has a nice Growth Score of B, a grade with the same score on the momentum front. However, 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 C. 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 these revisions indicates a downward shift. Notably, Nektar has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Nektar is part of the Zacks Medical - Drugs industry. Over the past month, ImmunoGen (IMGN), a stock from the same industry, has gained 7.9%. The company reported its results for the quarter ended March 2023 more than a month ago.

ImmunoGen reported revenues of $49.87 million in the last reported quarter, representing a year-over-year change of +31%. EPS of -$0.16 for the same period compares with -$0.10 a year ago.

ImmunoGen is expected to post a loss of $0.17 per share for the current quarter, representing a year-over-year change of +29.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +2.6%.

ImmunoGen has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.

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