Why Is AVEO (AVEO) Up 24.8% Since Last Earnings Report?

A month has gone by since the last earnings report for AVEO Pharmaceuticals (AVEO). Shares have added about 24.8% in that time frame, outperforming the S&P 500.

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

AVEO Pharmaceuticals’ Q1 Earnings & Revenues Miss Estimates

AVEO incurred a loss of 52 cents per share in first-quarter 2020, wider than the Zacks Consensus Estimate of a loss of 50 cents but narrower than the year-ago loss of 62 cents.

The company’s top line comprises collaboration and licensing revenues plus partnership royalties. Total revenues in the reported quarter were $0.8 million compared with $1.6 million in first-quarter 2019. Moreover, revenues missed the Zacks Consensus Estimate of $2 million.

Operating Expenses

Research & development expenses increased 14.7% year over year to $7.8 million. Meanwhile, general and administrative expenses soared 48% year over year to $3.7 million.

Cash Guidance

AVEO had $33.6 million worth of cash, cash equivalents and marketable securities as of Mar 31, 2020 compared with $47.7 million on Dec 31, 2019. Management believes that its cash balance along with anticipated partnership payments and royalty revenues from the Fotivda sale by EUSA will help fund its planned operations through the second quarter of 2021.

How Have Estimates Been Moving Since Then?

Estimates review followed an upward path over the past two months. The consensus estimate has shifted 13.55% due to these changes.

VGM Scores

Currently, AVEO has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

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

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