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Why Is Esperion Therapeutics (ESPR) Up 14.2% Since Last Earnings Report?

It has been about a month since the last earnings report for Esperion Therapeutics (ESPR). Shares have added about 14.2% in that time frame, outperforming the S&P 500.

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

Esperion Q1 Earnings and Revenues Beat Estimates

Esperion reported earnings of 34 cents per share in the first quarter of 2024 against the Zacks Consensus Estimate of a loss of 8 cents. The company incurred a loss of 79 cents per share in the year-ago quarter.

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Esperion generated revenues of $137.7 million, up nearly 467% year over year. The upside was driven by the receipt of a milestone payment and increased demand for the company’s drugs across all regions. Per management, this is the highest level of revenues generated by the company in a quarter. The reported figure beat the Zacks Consensus Estimate of $53.1 million.

Quarter in Detail

Esperion has two FDA-approved drugs in its commercial portfolio — Nexletol and Nexlizet. The company records royalties on sales of its drugs in Europe and other ex-U.S. markets.

Product revenues, solely from the United States, totaled $24.8 million in the first quarter, up 46% year over year. The upside was driven by continued prescription growth. During the quarter, the drugs’ retail prescription increased 43% year over year and 6% quarter over quarter.

The reported product revenues beat the Zacks Consensus Estimate of $24.1 million and our model estimate of $21.2 million.

Esperion recorded collaboration revenues, including combined royalty and partner revenues, of $113.0 million during the reported quarter, significantly up year over year. The surge can be attributed to the $100 million litigation-related settlement payment received from Daiichi Sankyo Europe (DSE) in January. Excluding this milestone payment, collaboration revenues rose 110% year over year.

Collaboration revenues significantly beat the Zacks Consensus Estimate and our model estimate of $29.0 million and $10.2 million, respectively.

Research and development (R&D) expenses declined 57% from the year-ago period’s levels to $13.4 million, primarily related to the close-out of the CLEAR Outcomes study.

Selling, general and administrative (SG&A) expenses were up 40% year over year to $42.0 million. The upside was driven by an increase in sales force, in addition to bonus payments and promotional costs.

As of Mar 31, 2024, Esperion had cash, cash equivalents, restricted cash and investment securities of $226.6 million compared with $82.2 million as of Dec 31, 2023. This surge in cash balance is driven by the settlement-related milestone payment received from DSE and the $90.7 million in net proceeds from the public offering received in January.

2024 Guidance

Esperion reiterated its financial outlook for 2024. The company expects operating expenses in the range of $225-$245 million, including $20 million in non-cash expenses related to stock compensation. The guidance for total operating expenses includes $45-$55 million in R&D expenses and $180-$190 million in SG&A expenses.

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 21.09% due to these changes.

VGM Scores

At this time, Esperion Therapeutics has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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. Notably, Esperion Therapeutics 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

Esperion Therapeutics is part of the Zacks Medical - Drugs industry. Over the past month, Zoetis (ZTS), a stock from the same industry, has gained 6.6%. The company reported its results for the quarter ended March 2024 more than a month ago.

Zoetis reported revenues of $2.19 billion in the last reported quarter, representing a year-over-year change of +9.5%. EPS of $1.38 for the same period compares with $1.31 a year ago.

Zoetis is expected to post earnings of $1.49 per share for the current quarter, representing a year-over-year change of +5.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.1%.

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

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