A month has gone by since the last earnings report for Conatus Pharmaceuticals Inc. (NASDAQ:CNAT) . Shares have added about 57.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it 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 catalysts.
Conatus Pharma Incurs Wider-than-Expected Loss in Fourth Quarter
Conatus reported fourth-quarter 2016 loss of 35 cents per share, wider than both the Zacks Consensus Estimate of a loss of 32 cents and the year-ago figure of 30 cents.
Conatus has no approved product in its portfolio at the moment. However, the company recognized $0.8 million as collaboration revenues for the fourth quarter 2016 compared with no revenue in the year-ago quarter. The collaboration revenues were related to an agreement with Novartis, which was inked in Dec 2016, for the worldwide development and commercialization of Conatus’ lead candidate, emricasan, as a single agent treatment for NASH (Nonalcoholic steatohepatitis) cirrhosis in both compensated and decompensated patients.
In the fourth quarter, research and development expenses were $6.5 million, up 54.8% from the year-ago quarter. This was mainly due to an increase in external cost related to emricasan. General and administrative expenses were $3.5 million, up 94.4% from the year-ago quarter. This was due to an increase in personnel costs and higher consulting, legal and accounting fees.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one upward revision for the current quarter.
VGM Scores
At this time, Conatus' stock has a great Growth Score of 'A', a grade with the same score on the momentum front. However, 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 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the stock is suitable for growth and momentum investors.
Outlook
Estimates have been broadly trending upward for the stock. The magnitude of this revision also looks promising. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
Conatus Pharmaceuticals Inc. (CNAT): Free Stock Analysis Report
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