Arena Pharmaceuticals (ARNA) Up 15.1% Since Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Arena Pharmaceuticals, Inc. ARNA. Shares have added about 15.1% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is ARNA due for a pullback? 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 catalysts.

Arena Pharmaceuticals Q1 Loss Wider Than Expected

Arena Pharmaceuticals reported a loss of 78 cents per share for the first quarter of 2018, wider than the Zacks Consensus Estimate of a loss of 70 cents. The year-ago loss was 90 cents per share.

Total revenues in the quarter were $1.76 million, up 5.7% from the year-ago quarter. Sales also beat the Zacks Consensus Estimate of $1 million. Revenues include $1 million from collaboration revenues and $0.7 million in royalty revenues from Japanese pharma company, Eisai, based upon Eisai’s sales of obesity drug Belviq to its distributors.

Research & development (R&D) expenses increased 40.6% from the year-ago level to $21.6 million.

General and administrative (SG&A) expenses were also up 48.2% to $11.2 million in the quarter.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter.

Arena Pharmaceuticals, Inc. Price and Consensus

 

Arena Pharmaceuticals, Inc. Price and Consensus | Arena Pharmaceuticals, Inc. Quote

VGM Scores

At this time, ARNA has a poor Growth Score of F and a grade with the same score on the momentum front. The stock was also 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.

Our style scores indicate investors will probably be better served looking elsewhere.

Outlook

Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. Notably, ARNA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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