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Alexion Pharmaceuticals (NasdaqGS:ALXN) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Alexion Pharmaceuticals, Inc. (NasdaqGS:ALXN) is scheduled to report Q3 earnings results before markets open for trading on October 29, 2020.

The company is expected to report earnings of $2.59/share on revenue of $1.429 billion. The consensus earnings per share (EPS) of $2.59/share is based on a poll of 19 analysts and represents a decline in eps of −7.1% over the same quarter last year, when the company reported earnings of $2.79/share.

The revenue forecast of $1.429 billion based on a poll of 16 analysts implies a year-over-year (YoY) growth in revenue of 13.1%. Last year the company reported $1.263 billion in revenue for the quarter.

Expected to report EPS contraction of −7.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,428.65 $1,263.10 13.1%
EPS $2.59 $2.79 −7.1%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from Alexion Pharmaceuticals, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $2.58 $3.11 20.5% Beat
Q1, 2020 $2.71 $3.22 18.7% Beat
Q4, 2019 $2.61 $2.71 3.9% Beat
Q3, 2019 $2.48 $2.79 12.7% Beat
Q2, 2019 $2.34 $2.64 12.9% Beat
Q1, 2019 $2.21 $2.39 8.3% Beat
Q4, 2018 $1.84 $2.14 16.4% Beat
Q3, 2018 $1.74 $2.02 16.1% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −2.0%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 30, 2020 $104.60 $102.49 −2.0% Decline
May 6, 2020 $98.25 $96.92 −1.4% Decline
January 30, 2020 $106.94 $99.39 −7.1% Decline
October 23, 2019 $99.28 $106.08 6.8% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.68, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.68 implies a 0.4% chance of earnings manipulation.

Fundamentals And Technical Analysis

Alexion Pharmaceuticals, Inc. is currently trading at $120.76/share, down −0.7% for the day. The company is trading at approximately 93.9% of its 52-week high of $128.57/share. The company’s stock price is up 17.8% since the last earnings report and down −2.6% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 56.56 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:ALXN Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 31.26 and a forward P/E multiple of 10.51.

Alexion Pharmaceuticals, Inc.’s current share price also implies a price-to-book (P/B) multiple of 2.52. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $120.76
P/E Ratio 31.3x
P/E Ratio (Fwd) 10.5x
PEG Ratio −0.9
Total Debt / Total Capital 9.6%
Levered Free Cash Flow $2.366 billion
EV / EBITDA 9.1x

Finbox

Alexion Pharmaceuticals, Inc. is a large-cap stock with a market capitalization of $26.448 billion and a total enterprise value of $26.414 billion. The company operates in the Healthcare sector and the Biotechnology industry.

Alexion Pharmaceuticals, Inc. develops and commercializes various therapeutic products. The company offers ULTOMIRIS (ALXN1210/ravulizumab-cwvz), a C5 inhibitor for the treatment of paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS); and SOLIRIS (eculizumab), a monoclonal antibody for the treatment of PNH, aHUS, generalized myasthenia gravis (gMG), and neuromyelitis optica spectrum disorder (NMOSD). It also provides Strensiq (asfotase alfa), a targeted enzyme replacement therapy for patients with hypophosphatasia; and Kanuma (sebelipase alfa) for the treatment of patients with lysosomal acid lipase deficiency. In addition, the company is developing ALXN1210 (Intravenous) that is in Phase III clinical trials for the treatment of gMG and NMOSD; ALXN1210 (Subcutaneous), which is in Phase III clinical trials for PNH and aHUS; ALXN1810 (Subcutaneous) that is in Phase I clinical trial for renal diseases; and ALXN1720 (Subcutaneous), which is in Phase I clinical trial for the treatment of disease states involving dysregulated terminal complement activity. Further, it is developing ALXN1840 (WTX101) that is in Phase III clinical trials for the treatment of Wilson disease; and ALXN1830 and ABY-039, which are in Phase I clinical trials for neonatal Fc receptor. The company serves distributors, pharmacies, hospitals, hospital buying groups, and other healthcare providers in the United States and internationally. Alexion Pharmaceuticals, Inc. has collaboration and license agreement with Halozyme Therapeutics, Inc.; collaborations with Caelum Biosciences, Inc., Dicerna Pharmaceuticals, Inc. and Zealand Pharma A/S; strategic agreement with Caelum Biosciences, Inc.; agreement with Stealth BioTherapeutics Corp.; and a partnership with Affibody AB. The company was founded in 1992 and is headquartered in Boston, Massachusetts.

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