Technology

Why Is Intersect ENT (XENT) Up 21.7% Since Last Earnings Report?

It has been about a month since the last earnings report for Intersect ENT (XENT). Shares have added about 21.7% in that time frame, outperforming the S&P 500.

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

Intersect ENT Reports Q3 Loss, Revenues Meet Estimates

Intersect ENT Inc. reported third-quarter 2019 loss per share of 41 cents, wider than the Zacks Consensus Estimate of loss of 40 cents. The reported loss was significantly wider than the year-ago loss of 25 cents.

Reported revenues in the third quarter declined 2.5% year over year to $24.1 million but came in line with the Zacks Consensus Estimate. The year-over-year downside resulted from lower sales of the PROPEL product portfolio. However, SINUVA contributed 5% to third-quarter 2019 revenues.

Margins

Cost of sales was $4.9 million in the reported quarter, down 6.3% year over year. Gross margin was 79.7%, reflecting an expansion of 82 basis points (bps) year over year.

Selling, general and administrative expenses were up 16.1% to $26.4 million in the quarter under review. Research and development expenses were $6.1 million, up 26.1% year over year. The company reported operating loss of $13.4 million compared with the year-ago operating loss of $8.2 million.

Cash Position

Intersect ENT exited the third quarter with cash, cash equivalents and short-term investments of $89.2 million compared with $93.5 million at the end of the second quarter.

2019 Guidance Reaffirmed

Intersect ENT expects 2019 revenues to be flat at $108.5 million reported in 2018 (unchanged from the prior provided figure). The Zacks Consensus Estimate for the metric is pegged at $108.6 million, which is above the company’s provided figure.

Its 2019 outlook for gross margin was reiterated at 80-81% and operating expenses outlook at $135-$137 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

VGM Scores

At this time, Intersect ENT has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, 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, Intersect ENT 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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