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Why Is Clovis (CLVS) Down 32% Since Last Earnings Report?

·3-min read

It has been about a month since the last earnings report for Clovis Oncology (CLVS). Shares have lost about 32% in that time frame, underperforming the S&P 500.

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

Clovis Q3 Loss Wider Than Expected, Revenues Lag

Clovis reported third-quarter 2021 net loss of 56 cents per share, wider than the Zacks Consensus Estimate of a loss of 48 cents but narrower than the year-ago loss of 89 cents.

Adjusted loss (excluding acquired in-process research and development as well as foreign currency loss) was 52 cents per share compared with 90 cents in the year-ago quarter.

Net revenues — entirely from Clovis’ only marketed drug, Rubraca — were down 2% year over year to $37.9 million for the quarter, missing the Zacks Consensus Estimate of $38.7 million.

Quarter in Detail

Sales of Rubraca in the United States were $28.7 million, down 15.3% year over year. Ex-U.S. market sales were $9.2 million for the third quarter, up 87.8% year over year. Lower sales were due to COVID-19 impacts as fewer patients were treated for ovarian cancer amid the pandemic.

For the third quarter, research & development expenses decreased 27% year over year to $46.2 million, primarily due to lower spending on Rubraca clinical studies.

Selling, general and administrative expenses declined 17% year over year to $32.2 million, driven by cost-saving initiatives and savings due to the COVID-19 situation globally.

Clovis ended the quarter with $171.9 million of cash equivalents and available-for-sale securities compared with $230.2 million on Jun 30, 2021.

The company expects cash resources, and revenues and available financing sources to be enough to support operations for at least the next 12 months.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates review.

VGM Scores

Currently, Clovis has a great Growth Score of A, though it is lagging a lot on the Momentum Score front 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 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 looks promising. Notably, Clovis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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