Technology

Medicines Co. (MDCO) Up 12.9% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Medicines Co. (MDCO). Shares have added about 12.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Medicines Co. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Medicines Company’s Q4 Loss Widens, Revenues Nil

The Medicines Company incurred fourth-quarter 2018 adjusted loss of 62 cents per share, wider than the Zacks Consensus Estimate of a loss of 53 cents. The same also deteriorated from the year-ago loss of 61 cents.

In fourth-quarter 2018, the Medicines Company did not generate any revenues. The Zacks Consensus Estimate for the metric was pegged at $6.6 million. However, in the prior-year quarter, the company’s revenues grossed $8.6 million.

Adjusted research and development (R&D) expenses decreased 14.3% year over year to $27.7 million.

Adjusted selling, general and administrative expenses (SG&A) were down 45% year over year to $11.4 million in the reported quarter.

The Medicines Company’s cash and cash equivalents as of Dec 31, 2018 totaled $238.3 million compared with $118.7 million on Sep 30, 2018. The company believes that its existing cash balance will enable it to fund operating expenses through 2020.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -102.86% due to these changes.

VGM Scores

Currently, Medicines Co. has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest 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.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Medicines Co. 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.

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