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Horizon Therapeutics Q3 Earnings: Buying Soaring NasdaqGS:HZNP Stock Before Call?

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Horizon Therapeutics Public Limited Company (NasdaqGS:HZNP) is scheduled to report Q3 earnings results on November 2, 2020.

The company is expected to report earnings of $0.97/share on revenue of $527.6 million. The consensus earnings per share (EPS) of $0.97/share is based on a poll of 11 analysts and represents a growth in eps of 51.4% over the same quarter last year, when the company reported earnings of $0.64/share.

The revenue forecast of $527.6 million based on a poll of 8 analysts implies a year-over-year (YoY) growth in revenue of 57.3%. Last year the company reported $335.5 million in revenue for the quarter.

Expected to report EPS growth of 51.4% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $527.63 $335.47 57.3%
EPS $0.97 $0.64 51.4%

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 Horizon Therapeutics Public Limited Company for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.36 $0.40 12.1% Beat
Q1, 2020 $0.21 $0.40 88.7% Beat
Q4, 2019 $0.42 $0.56 33.0% Beat
Q3, 2019 $0.50 $0.64 28.8% Beat
Q2, 2019 $0.37 $0.49 31.1% Beat
Q1, 2019 $0.12 $0.30 151.2% Beat
Q4, 2018 $0.54 $0.67 23.7% Beat
Q3, 2018 $0.51 $0.65 28.4% 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 increasing 16.9%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 5, 2020 $61.79 $72.22 16.9% Increase
May 6, 2020 $37.38 $42.03 12.4% Increase
February 26, 2020 $33.88 $34.06 0.5% Increase
November 6, 2019 $29.85 $29.65 −0.7% Decline

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 −1.81, the model suggests that the company is a possible earnings manipulator. A value of −1.81 implies a 3.5% chance of earnings manipulation.

Fundamentals And Technical Analysis

Horizon Therapeutics Public Limited Company is currently trading at $77.27/share, down −0.2% for the day. The company is trading at approximately 89.2% of its 52-week high of $86.67/share. The company’s stock price is up 7.0% since the last earnings report and up 4.0% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 51.94 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:HZNP Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 32.91 and a forward P/E multiple of 27.04.

Horizon Therapeutics Public Limited Company’s current share price also implies a price-to-book (P/B) multiple of 7.21. 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) $77.27
P/E Ratio 32.9x
P/E Ratio (Fwd) 27.0x
PEG Ratio 0.1
Total Debt / Total Capital 6.7%
Levered Free Cash Flow $184.9 million
EV / EBITDA 122.9x

Finbox

Horizon Therapeutics Public Limited Company is a large-cap stock with a market capitalization of $17.026 billion and a total enterprise value of $17.534 billion. The company operates in the Healthcare sector and the Pharmaceuticals industry.

Horizon Therapeutics Public Limited Company, a biopharmaceutical company, focuses on researching, developing, and commercializing medicines that address unmet treatment needs for rare and rheumatic diseases in the United States and internationally. Its orphan and rheumatology marketed medicines include KRYSTEXXA, a medicine for the treatment of uncontrolled gout; RAVICTI for use as a nitrogen-binding agent for chronic management of adult and pediatric patients; PROCYSBI for nephropathic cystinosis, a rare and life-threatening metabolic disorder; ACTIMMUNE for chronic granulomatous disease; RAYOS for the treatment of multiple conditions, rheumatoid arthritis; BUPHENYL tablets for oral administration and BUPHENYL powder for oral, nasogastric, or gastrostomy tube administration; and QUINSAIR, a formulation of the antibiotic drug levofloxacin for the management of chronic pulmonary infections due to Pseudomonas aeruginosa in adult patients with cystic fibrosis. The company’s primary care marketed medicines comprise PENNSAID 2% that is indicated for the treatment of pain of osteoarthritis of the knees; DUEXIS for the relief of signs and symptoms of RA and OA, and to decrease the risk of developing upper-GI ulcers; VIMOVO for the relief of signs and symptoms of OA, RA, and AS and to decrease the risk of developing gastric ulcers in patients at risk of developing NSAID-associated gastric ulcers; and MIGERGOT, a therapy to abort or prevent vascular headaches, such as migraines and migraine variants. It has collaboration agreements with Alliance for Lupus Research, Syneos Health, Inc., and HemoShear Therapeutics, LLC. The company was formerly known as Horizon Pharma Public Limited Company and changed its name to Horizon Therapeutics Public Limited Company in May 2019. Horizon Therapeutics Public Limited Company was founded in 2005 and is headquartered in Dublin, Ireland.

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