Seattle Genetics’ 1Q16 Earnings: What Are Analysts Expecting?

Seattle Genetics' 1Q16 Earnings: What Can We Expect?

A look at Seattle Genetics’ estimates

Seattle Genetics (SGEN), a Washington-based biotechnology company, develops antibody-based therapies used for the treatment of various types of cancers. Seattle Genetics is set to release its first-quarter 2016 earnings on April 28, 2016. Analysts estimate revenues of around $116 million for 1Q16.

Seattle Genetics’ stock has returned nearly 4% over last the 12 months, while competitors Vertex Pharmaceuticals (VRTX), ARIAD Pharmaceuticals (ARIA), and Incyte (INCY) have fallen by ~35%, ~21%, and ~26%, respectively, during the same period. The value of the PowerShares Dynamic Biotechnology ETF (PBE) has fallen by 27.8% during the same period. PBE holds ~2.8% of its total investments in Seattle Genetics. Investors can find the earnings review for other companies on our Pharmaceuticals Earnings Overview page.

Revenue estimates

Analysts estimate that revenues will increase by ~41% year-over-year to ~$115.9 million in 1Q16, mainly driven by increased revenues from Adcetris. The net adjusted losses are estimated to fall to 13.3% of revenues for 1Q16, compared with 26.4% in 1Q15. Revenue estimates show year-over-year increases of ~26% to $97 million in 2Q16, 22% to $102.6 million in 3Q16, and 16% to $108.2 million in 4Q16. For fiscal 2016, analysts’ estimates show an increase in revenues by ~26% to $424 million, compared with $336.8 million in 2015.

Analysts’ recommendations

The SGEN stock has returned nearly 4.1% in the last 12 months and analysts estimate the stock has a potential to return ~17%. Analysts’ recommendations show a 12-month target price of $45.50 per share, compared with $38.99 per share on April 18, 2016. While 47% of analysts have given a “buy” recommendation and 47% of analysts recommend to “hold,” only 6% analysts recommend to “sell,” according to Bloomberg. The changes in analysts’ estimates and recommendations are based on the changing trends in the stock price.

To divest risk, investors could consider ETFs such as the First Trust NYSE Arca Biotechnology Index ETF (FBT), which holds ~3.5% of its total assets in Seattle Genetics. What can investors expect from Seattle Genetics’ 1Q16 earnings? Read on to find out.

Continue to Next Part

Browse this series on Market Realist:

• Part 2 - Seattle Genetics: Why Are Its 1Q16 Revenues Expected to Grow?

• Part 3 - What Can We Expect from Seattle Genetics’s Adcetris in 1Q16?

• Part 4 - Seattle Genetics: Its Collaboration and License Agreements