Why Is Nektar (NKTR) Up 6.2% Since Last Earnings Report?

A month has gone by since the last earnings report for Nektar Therapeutics (NKTR). Shares have added about 6.2% in that time frame, outperforming the S&P 500.

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

Nektar Q3 Earnings & Revenues Top Estimates

Nektar Therapeutics reported a loss of 56 cents per share for the third quarter of 2019, narrower than the Zacks Consensus Estimate of a loss of 73 cents but flat year over year.

Quarterly revenues were up 5% year over year to $29.2 million, which beat the Zacks Consensus Estimate of $26.21 million.

Quarter in Detail

Nektar’s top line comprises product sales, royalty revenues, non-cash royalty revenues besides license, collaboration and other revenues.

In the third quarter, product sales increased 30.6% from the year-ago period to $5.6 million.  Non-cash royalty revenues were up 22.6% to $10.3 million.

Nektar’s royalty revenues remained almost flat year over year at $10.3 million in the quarter.

License, collaboration and other revenues came in at $3.1 million, registering a decline of 36% year over year.

Research and development expenses declined 3.8% to $99 million, primarily due to lower expense related to clinical development of bempegaldesleukin

General and administrative expenses were up 28.3% to $24 million in the reported quarter, primarily due to costs related to commercialization initiatives to support launch of NKTR-181 upon potential approval and higher stock-based compensation expenses.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 10.88% due to these changes.

VGM Scores

At this time, Nektar has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second 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 upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Nektar has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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