Why Is Nektar (NKTR) Down 16.1% Since Last Earnings Report?

A month has gone by since the last earnings report for Nektar Therapeutics (NKTR). Shares have lost about 16.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Nektar due for a breakout? 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 Q4 Earnings & Revenues Top Estimates

Nektar Therapeutics reported a loss of 64 cents per share for the fourth quarter of 2019, narrower than the Zacks Consensus Estimate of a loss of 69 cents but wider than a loss of 57 cents per share incurred in the year-ago period.

Quarterly revenues were down 14.8% year over year to $33.9 million. However, revenues comfortably beat the Zacks Consensus Estimate of $26.3 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 fourth quarter, product sales increased 33.4% from the year-ago period to $5.8 million. Non-cash royalty revenues were down 2.8% to $8.7 million.

Nektar’s royalty revenues were up 1.1% year over year to $12.2 million in the quarter.

License, collaboration and other revenues came in at $7.1 million, registering a decline of 50.6% year over year.

Research and development expenses increased 1.4% to $110.4 million, primarily due to higher expense related to clinical development of bempeg and other pipeline candidates.

General and administrative expenses were up 14.2% to $27.1 million in the reported quarter.

Full-Year Results

Nektar reported total revenues of $114.6 million in 2019 compared with $1.19 billion in the year-ago period. The significant decrease was due to an upfront payment of $1.06 billion from Bristol-Myers related to a collaboration agreement recorded in 2018. The company reported loss of $2.52 per share in 2019 against earnings of $3.78 in 2018.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -32.55% due to these changes.

VGM Scores

At this time, Nektar has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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

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