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Aduro Biotech (ADRO) Up 17.4% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Aduro Biotech (ADRO). Shares have added about 17.4% in that time frame, outperforming the S&P 500.

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

Aduro Q2 Loss Narrower Than Expected, Revenues Miss

Aduro incurred second-quarter 2018 loss of 31 cents per share, narrower than the Zacks Consensus Estimate of a loss of 33 cents but wider than the year-ago loss of 27 cents.

Revenues came in at $2.6 million, down 56% year over year due to lower reimbursement from partner Novartis due to accounting changes. The top line also missed the Zacks Consensus Estimate of $4.3 million.

Research and development expenses declined 9.3% in the reported quarter to $19.4 million due to lower expenses related to the company's pipeline candidates, namely ADU-1604 and BION-1301. Additionally, the termination of CRS-207 also lowered the development expenses.

General and administrative expenses were $8.8 million, down 7.3% year over year, primarily on higher stock-based compensation expense and legal fees.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month. The consensus estimate has shifted 6.94% due to these changes.

VGM Scores

At this time, Aduro Biotech has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.

The company's stock is suitable solely for momentum based on our style scores.

Outlook

Aduro Biotech has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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