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Why Is Epizyme (EPZM) Up 51.7% Since Last Earnings Report?

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A month has gone by since the last earnings report for Epizyme (EPZM). Shares have added about 51.7% in that time frame, outperforming the S&P 500.

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

Epizyme's Q1 Loss Wider Than Expected, Revenues Lag

Epizyme incurred a loss of 38 cents per share for first-quarter 2022, narrower than the year-ago period’s loss of 69 cents.

Adjusted loss (excluding gains on change in fair value of warrants to purchase common stock) for the first quarter was 39 cents, wider than the Zacks Consensus Estimate of a loss of 35 cents.

Total revenues for the first quarter were $8.7 million, which missed the Zacks Consensus Estimate of $10.9 million but increased from the year-ago quarter’s $7.6 million.

Quarter in Detail

The company’s sole marketed drug Tazverik generated net product revenues worth $8.7 million in the first quarter. Commercial sales of the drug were $8.1 million, which grew 10% sequentially.

Adjusted research and development expenses declined to $27.8 million from $30.3 million in the year-ago quarter. Selling, general and administrative expenses also declined to $23.6 million from $31.5 million in the prior-year quarter.

Epizyme had $199.7 million of cash, cash equivalents and marketable securities as of Mar 31, 2022, compared with $176.8 million on Dec 31, 2021

How Have Estimates Been Moving Since Then?

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

The consensus estimate has shifted -35% due to these changes.

VGM Scores

At this time, Epizyme has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth 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 these revisions indicates a downward shift. Notably, Epizyme 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

Epizyme is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Prothena (PRTA), a stock from the same industry, has gained 13.1%. The company reported its results for the quarter ended March 2022 more than a month ago.

Prothena reported revenues of $1.15 million in the last reported quarter, representing a year-over-year change of +618.8%. EPS of -$0.78 for the same period compares with -$0.91 a year ago.

For the current quarter, Prothena is expected to post a loss of $0.51 per share, indicating a change of -187.9% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

Prothena has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.


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