Exelixis (NasdaqGS:EXEL) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Exelixis, Inc. (NasdaqGS:EXEL) is scheduled to report Q3 earnings results after markets close for trading on November 5, 2020.

The company is expected to report earnings of $0.05/share on revenue of $215.7 million. The consensus earnings per share (EPS) of $0.05/share is based on a poll of 11 analysts and represents a decline in eps of −85.6% over the same quarter last year, when the company reported earnings of $0.34/share.

The revenue forecast of $215.7 million based on a poll of 13 analysts implies a year-over-year (YoY) decline in revenue of −20.6%. Last year the company reported $271.7 million in revenue for the quarter.

Expected to report EPS contraction of −85.6% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $215.65 $271.70 −20.6%
EPS $0.05 $0.34 −85.6%

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 Exelixis, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.14 $0.25 77.2% Beat
Q1, 2020 $0.17 $0.19 10.1% Beat
Q4, 2019 $0.21 $0.26 22.1% Beat
Q3, 2019 $0.22 $0.34 51.6% Beat
Q2, 2019 $0.28 $0.29 4.7% Beat
Q1, 2019 $0.23 $0.24 2.1% Beat
Q4, 2018 $0.23 $0.37 61.9% Beat
Q3, 2018 $0.17 $0.41 141.2% 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 −3.0%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $23.05 $22.36 −3.0% Decline
May 5, 2020 $25.63 $26.19 2.2% Increase
February 25, 2020 $20.18 $18.69 −7.4% Decline
October 30, 2019 $16.94 $15.45 −8.8% 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 −2.61, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.61 implies a 0.5% chance of earnings manipulation.

Fundamentals And Technical Analysis

Exelixis, Inc. is currently trading at $21.02/share, down −2.9% for the day. The company is trading at approximately 76.0% of its 52-week high of $27.80/share. The company’s stock price is down −6.0% since the last earnings report and down −3.5% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 35.42 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:EXEL Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 23.29 and a forward P/E multiple of 39.24.

Exelixis, Inc.’s current share price also implies a price-to-book (P/B) multiple of 3.58. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $21.02
P/E Ratio 23.3x
P/E Ratio (Fwd) 39.2x
PEG Ratio −0.4
Total Debt / Total Capital 0.7%
Levered Free Cash Flow $372.1 million
EV / EBITDA 15.3x

Finbox

Exelixis, Inc. is a mid-cap stock with a market capitalization of $6.69 billion and a total enterprise value of $5.525 billion. The company operates in the Healthcare sector and the Biotechnology industry.

Exelixis, Inc., an oncology-focused biotechnology company, focuses on the discovery, development, and commercialization of new medicines to treat cancers in the United States. The company’s products include CABOMETYX tablets for the treatment of patients with advanced renal cell carcinoma who received prior anti-angiogenic therapy; and COMETRIQ capsules for the treatment of patients with progressive and metastatic medullary thyroid cancer. Its CABOMETYX and COMETRIQ are derived from cabozantinib, an inhibitor of multiple tyrosine kinases, including MET, AXL, RET, and VEGF receptors. The company also offers COTELLIC, an inhibitor of MEK as a combination regimen to treat advanced melanoma; and MINNEBRO, an oral non-steroidal selective blocker of the mineralocorticoid receptor for the treatment of hypertension in Japan. In addition, Exelixis, Inc. is developing XL092, an oral tyrosine kinase inhibitor that targets VEGF receptors, MET, and other kinases implicated in growth and spread of cancer. It has collaboration and license agreement with Ipsen Pharma SAS, Takeda Pharmaceutical Company Ltd., Roche, Aurigene Discovery Technologies Limited, Iconic Therapeutics, Inc., Invenra, Inc., StemSynergy Therapeutics, Inc., Genentech, Inc., GlaxoSmithKline, Bristol-Myers Squibb Company, Merck, Daiichi Sankyo Company, Limited, and clinical collaboration with Ipsen. The company was formerly known as Exelixis Pharmaceuticals, Inc. and changed its name to Exelixis, Inc. in February 2000. Exelixis, Inc. was founded in 1994 and is headquartered in Alameda, California.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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