bunch of white oval medication tablets and white medication capsules

Aerie Pharmaceuticals (NasdaqGM:AERI) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Aerie Pharmaceuticals, Inc. (NasdaqGM:AERI) is scheduled to report Q3 earnings results after markets close for trading on November 5, 2020.

The company is expected to report earnings of -$0.80/share on revenue of $19.459 million. The consensus earnings per share (EPS) of -$0.80/share is based on a poll of 9 analysts and represents a growth in eps of 7.5% over the same quarter last year, when the company reported earnings of -$0.86/share.

The revenue forecast of $19.459 million based on a poll of 10 analysts implies a year-over-year (YoY) growth in revenue of 4.9%. Last year the company reported $18.544 million in revenue for the quarter.

Expected to report EPS of -$0.80/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $19.46 $18.54 4.9%
EPS -$0.80 -$0.86 7.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 2 out of the last 8 tracked quarters, and missed expectations 6 quarters.

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.80 -$0.83 -3.6% Missed
Q1, 2020 -$0.78 -$0.84 -8.4% Missed
Q4, 2019 -$0.77 -$0.96 -24.8% Missed
Q3, 2019 -$0.80 -$0.86 -7.7% Missed
Q2, 2019 -$0.88 -$0.80 9.5% Beat
Q1, 2019 -$0.95 -$0.78 17.5% Beat
Q4, 2018 -$0.87 -$0.92 -5.7% Missed
Q3, 2018 -$1.38 -$1.73 -25.0% Missed

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 4.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 7, 2020 $12.10 $12.61 4.2% Increase
May 6, 2020 $15.97 $14.45 −9.5% Decline
February 20, 2020 $19.47 $21.59 10.9% Increase
November 6, 2019 $23.82 $18.48 −22.4% 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 −3.63, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.63 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Aerie Pharmaceuticals, Inc. is currently trading at $10.61/share, down −1.7% for the day. The company is trading at approximately 40.4% of its 52-week high of $26.26/share. The company’s stock price is down −15.9% since the last earnings report and up 7.1% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 45.92 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGM:AERI Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −2.45 and a forward P/E multiple of −3.34.

Aerie Pharmaceuticals, Inc.’s current share price also implies a price-to-book (P/B) multiple of 5.50. The following table summarizes some other key fundamental ratios:

Data as of November 1, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $10.61
P/E Ratio −2.4x
P/E Ratio (Fwd) −3.3x
PEG Ratio −0.2
Total Debt / Total Capital 30.0%
Levered Free Cash Flow -$142.4 million
EV / EBITDA −3.1x

Finbox

Aerie Pharmaceuticals, Inc. is a small-cap stock with a market capitalization of $493.5 million and a total enterprise value of $466.6 million. The company operates in the Healthcare sector and the Pharmaceuticals industry.

Aerie Pharmaceuticals, Inc., an ophthalmic pharmaceutical company, focuses on the discovery, development, and commercialization of first-in-class therapies for the treatment of glaucoma, dry eye, retinal diseases, and other eye diseases. Its products include Rhopressa, a once-daily eye drop to reduce elevated intraocular pressure (IOP) in patients with glaucoma or ocular hypertension; and Rocklatan, a once-daily fixed-dose combination of Rhopressa and latanopros to reduce IOP to treat patients with open-angle glaucoma and ocular hypertension. The company is also developing AVX-012, a clinical-stage dry eye product candidate; and AR-1105 and AR-13503 sustained-release implants for treating retinal diseases. Aerie Pharmaceuticals, Inc. has a collaborative research, development, and licensing agreement with DSM. Aerie Pharmaceuticals, Inc. was founded in 2005 and is headquartered in Durham, North Carolina.

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.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.