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Repligen (RGEN) Up 21.3% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Repligen (RGEN). Shares have added about 21.3% in that time frame, outperforming the S&P 500.

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

Repligen’s Q3 Earnings & Revenue Beat Estimates

Repligen reported third-quarter 2023 adjusted earnings per share (EPS) of 23 cents, which beat the Zacks Consensus Estimate of 14 cents. The company had recorded adjusted earnings of 77 cents per share in the year-ago quarter.

Total revenues of $141.2 million also beat the Zacks Consensus Estimate of $138 million. Sales declined 30% year over year and 31% at constant currency (cc), as there were no COVID-related revenues recorded in the reported quarter.

Quarter in Details

The company reported product revenues of $141.1 million, down 29.6% from the year-ago period. It also reported royalty and other revenues of $0.03 million, up 9.1% year over year.

Repligen’s base business revenues of $140.1 million declined 19% year over year at cc.

The company’s base business can be categorized under four franchises such as filtration, chromatography, protein and process analytics.

Revenues from the chromatography business declined in the third quarter owing to stiff competition. Repligen expects full-year chromatography business revenues to be flat.

COVID-related revenues for the reported quarter were nil compared with $29 million in the year-ago quarter.

Sales in the protein franchise were also weak in the reported quarter, owing to a slowdown in demand for pharma accounts. Repligen continues to expect revenues from this business to decline 10 in 2023.

The filtration franchise’s sales declined 35% year over year as COVID-related revenues plunged in the reported quarter. Base filtration business sales were down 17%. RGEN continues to expect revenues from this business to be down 30% in 2023.

Meanwhile, the process analytics franchise revenues were up 7% year over year as FlowVPX and RPM systems continued to witness strong demand in the quarter. However, the performance of this franchisee was below management’s expectations. Repligen now anticipates this business to grow in high single digits versus the earlier projection of 15% growth in 2023.

The gene therapy business contributed almost 20% of Repligen’s total revenues in the quarter, indicating growth of 11% year on year.

Adjusted gross margin was 42%, down from 57% in the prior year quarter due to a decline in production volumes and a less favorable product mix.

Adjusted research and development expenses totaled approximately $10.5 million, down 2.9% from the year-ago quarter’s level.

Adjusted selling, general and administrative expenses amounted to $43.6 million, down 5.4% year over year.

Adjusted operating income totaled $5.2 million, down 91.1% from the prior year quarter.

As of Sep 30, 2023, Repligen had cash and cash equivalents worth $630.8 million compared with $603.7 million as of Jun 30, 2023.

2023 Guidance

Repligen tightened its revenue and profit guidance for 2023.

The company now expects total revenues in the range of $635-$645 million compared with the earlier projected band of $635-$665 million.

Repligen now anticipates base business revenues to decline 8.5-9.5% on a reported basis against the previously projected range of 5-9% on the same basis.

Adjusted net income is estimated in the band of $97-$100 million, down from the earlier guidance of $98-$102 million. Adjusted operating income is anticipated in the $96-$100 million range, lower than the earlier projected band of $104-$110 million.

Repligen expects adjusted gross margin in the 49-50% range, down from the previous guidance of 50-51%. Adjusted operating margin is anticipated in the band of 15-16%, down from the earlier projection of 16-17%.

Adjusted EPS is anticipated between $1.70 and $1.76, indicating a decline from the prior estimation of $1.72 and $1.80.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -18.56% due to these changes.

VGM Scores

Currently, Repligen has a poor Growth Score of F, a grade with the same score on the momentum front. 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 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, Repligen 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

Repligen is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Blueprint Medicines (BPMC), a stock from the same industry, has gained 14.3%. The company reported its results for the quarter ended September 2023 more than a month ago.

Blueprint Medicines reported revenues of $56.57 million in the last reported quarter, representing a year-over-year change of -14.3%. EPS of -$2.20 for the same period compares with -$2.23 a year ago.

For the current quarter, Blueprint Medicines is expected to post a loss of $2.02 per share, indicating a change of +23.8% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.5% over the last 30 days.

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

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