Why Is AVEO Pharmaceuticals (AVEO) Down 1.6% Since Its Last Earnings Report?

It has been about a month since the last earnings report for AVEO Pharmaceuticals, Inc. AVEO. Shares have lost about 1.6% in that time frame.

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

AVEO Q1 Loss Widens

AVEO reported first-quarter 2018 loss of 8 cents per share, wider than the Zacks Consensus Estimate of a loss of 7 cents but narrower than the year-ago loss of 12 cents. However, excluding gains related to a change in fair value of warrant liability, the company reported a loss of 6 cents per share.

The company did not record any Fotivda sales during the quarter. AVEO’s top line comprises collaboration and licensing revenues and partnership royalties. Total revenues in the first quarter were approximately $1 million, down 59.5% from the year-ago figure. Revenues were almost in line with the Zacks Consensus Estimate of $0.98 million.

Quarterly Highlights

Research & development expenses were down 32.1% to about $5.4 million. However, general and administrative expenses increased 12% year over year to $2.6 million.

Cash Guidance

AVEO expects that its present cash resources of $27 million will allow the company to fund its planned operations through the first quarter of 2019.

How Have Estimates Been Moving Since Then?

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

AVEO Pharmaceuticals, Inc. Price and Consensus

 

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

VGM Scores

At this time, AVEO has a nice Growth Score of B. Its Momentum is doing a bit better with an A. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for momentum investors than growth investors.

Outlook

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

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