NovoCure Limited (NasdaqGS:NVCR) is scheduled to report Q3 earnings results before markets open for trading on October 29, 2020.
The company is expected to report earnings of $0.04/share on revenue of $120 million. The consensus earnings per share (EPS) of $0.04/share is based on a poll of 8 analysts and represents a growth in eps of 96.2% over the same quarter last year, when the company reported earnings of $0.02/share.
The revenue forecast of $120 million based on a poll of 9 analysts implies a year-over-year (YoY) growth in revenue of 30.4%. Last year the company reported $92.062 million in revenue for the quarter.
| Metric | Expected | Prior Year | YoY Change |
|---|---|---|---|
| Revenue | $120.02 | $92.06 | 30.4% |
| EPS | $0.04 | $0.02 | 96.2% |
Earnings Call Trends
Historically, management has exceeded analyst expectations 7 out of the last 7 tracked quarters, and missed 1 quarter.
What are your expectations from NovoCure Limited for earnings this quarter? Let us know in the comments!
| Quarter | Expected | Reported | Surprise | Result |
|---|---|---|---|---|
| Q2, 2020 | $0.01 | $0.02 | 287.6% | Beat |
| Q1, 2020 | $0.03 | $0.04 | 17.6% | Beat |
| Q4, 2019 | $0 | $0.04 | 900.0% | Beat |
| Q3, 2019 | -$0.04 | $0.02 | 154.9% | Beat |
| Q2, 2019 | -$0.06 | -$0.01 | 84.4% | Beat |
| Q1, 2019 | -$0.15 | -$0.13 | 11.2% | Beat |
| Q4, 2018 | -$0.13 | -$0.17 | -29.5% | Missed |
| Q3, 2018 | -$0.14 | -$0.13 | 7.7% | 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 11.5%.
| Report Date | Price Day Prior | Price Next Day | Change % | Result |
|---|---|---|---|---|
| July 30, 2020 | $68 | $75.79 | 11.5% | Increase |
| April 30, 2020 | $73.54 | $60.48 | −17.8% | Decline |
| February 27, 2020 | $79.45 | $72.75 | −8.4% | Decline |
| October 31, 2019 | $74.27 | $75.36 | 1.5% | 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 −2.17, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.17 implies a 1.5% chance of earnings manipulation.
Fundamentals And Technical Analysis
NovoCure Limited is currently trading at $121.50/share, down −1.8% for the day. The company is trading at approximately 86.2% of its 52-week high of $140.89/share. The company’s stock price is up 60.3% since the last earnings report and down −7.9% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 54.58 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.
The current share price implies a price-to-earnings (P/E) multiple of 1,041.16 and a forward P/E multiple of 829.05.
NovoCure Limited’s current share price also implies a price-to-book (P/B) multiple of 45.86. The following table summarizes some other key fundamental ratios:
| Metric | Value |
|---|---|
| Last Reported Fiscal Period Key | FY2020.Q2 |
| Period End Date | June 30, 2020 |
| Stock Price (Current) | $121.50 |
| P/E Ratio | 1,041.2x |
| P/E Ratio (Fwd) | 829.1x |
| PEG Ratio | 8.4 |
| Total Debt / Total Capital | 1.3% |
| Levered Free Cash Flow | $24.377 million |
| EV / EBITDA | 816.0x |
NovoCure Limited is a large-cap stock with a market capitalization of $12.283 billion and a total enterprise value of $12.099 billion. The company operates in the Healthcare sector and the Healthcare Equipment & Supplies industry.
NovoCure Limited, an oncology company, engages in the development, manufacture, and commercialization of Optune for the treatment of a variety of solid tumors. The company markets Optune and NovoTTF-100L, a Tumor Treating Fields delivery system for use as a monotherapy treatment for adult patients with glioblastoma. It is also developing products that are in Phase 2 pilot and Phase 3 pivotal trials for brain metastases, non-small cell lung cancer, pancreatic cancer, ovarian cancer, liver cancer, and mesothelioma. The company markets its products in the European Union, Japan, and internationally. It has a clinical trial collaboration agreement with MSD to evaluate tumor treating fields together with KEYTRUDA, an anti-PD-1 therapy. NovoCure Limited was founded in 2000 and is based in Saint Helier, Jersey.
