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Allogene Therapeutics (ALLO) Down 17.5% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Allogene Therapeutics (ALLO). Shares have lost about 17.5% in that time frame, underperforming the S&P 500.

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

Reports Wider-Than-Expected Loss in Q1

Allogeneincurred a loss of 68 cents per share in first-quarter 2023, wider than the Zacks Consensus Estimate and our model estimate of a loss of 63 cents and 60 cents, respectively. In the year-ago quarter, the company reported a loss of 56 cents.

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ALLO recorded revenues of $0.05 million during the quarter, missing the Zacks Consensus Estimate and our model estimate both of which were pegged at $0.1 million. Revenues were down 14.8% year over year.

Quarter in Detail

Research & development (R&D) expenses were $80.2 million, up 33.4% from the year-ago quarter’s level.

General and administrative (G&A) expenses declined 5.1% year over year to $18.9 million.

Allogene had $514.0 million of cash, cash equivalents and investments as of Mar 31, 2023, compared with $576.5 million as of Dec 31, 2022.

2023 Guidance

Allogene anticipates operating expenses for the full year to be approximately $340 million, down from the previous guidance of $350 million.

Cash burn for 2023 is expected to be approximately $230 million, down from the previous guidance of $250 million. Based on these projections, management expects the existing cash runway to be sufficient to fund operations into second-quarter 2025

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

The consensus estimate has shifted 6.15% due to these changes.

VGM Scores

At this time, Allogene Therapeutics has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, 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 upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Allogene Therapeutics has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Allogene Therapeutics belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Alkermes (ALKS), has gained 2% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.

Alkermes reported revenues of $287.6 million in the last reported quarter, representing a year-over-year change of +3.3%. EPS of $0.01 for the same period compares with $0.12 a year ago.

For the current quarter, Alkermes is expected to post earnings of $0.16 per share, indicating a change of +166.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +72.1% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Alkermes. Also, the stock has a VGM Score of D.

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Allogene Therapeutics, Inc. (ALLO) : Free Stock Analysis Report

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