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Deciphera Pharmaceuticals Q3 Earnings: Buying Soaring NasdaqGS:DCPH Stock Before Call?

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Deciphera Pharmaceuticals, Inc. (NasdaqGS:DCPH) is scheduled to report Q3 earnings results on November 5, 2020.

The company is expected to report earnings of -$1.31/share on revenue of $6.584 million. The consensus earnings per share (EPS) of -$1.31/share is based on a poll of 8 analysts and represents a decline in eps of -2.5% over the same quarter last year, when the company reported earnings of -$1.28/share.

The revenue forecast of $6.584 million based on a poll of 9 analysts implies a year-over-year (YoY) growth in revenue of -. Last year the company reported zero in revenue for the quarter.

Expected to report EPS of -$1.31/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $6.58 $0.00
EPS -$1.31 -$1.28 -2.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 2 out of the last 8 tracked quarters, missed 5 quarters, and met expectations 1 quarter.

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$1.39 -$1.20 13.9% Beat
Q1, 2020 -$1.28 -$1.36 -6.4% Missed
Q4, 2019 -$1.22 -$1.31 -7.8% Missed
Q3, 2019 -$1.16 -$1.28 -10.6% Missed
Q2, 2019 -$1.06 -$0.56 47.1% Beat
Q1, 2019 -$0.88 -$1.25 -42.6% Missed
Q4, 2018 -$0.72 -$0.86 -19.7% Missed
Q3, 2018 -$0.65 -$0.65 0% Met

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 −2.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $49.46 $48.40 −2.1% Decline
May 5, 2020 $56.26 $55.29 −1.7% Decline
March 9, 2020 $52.43 $49.99 −4.7% Decline
November 4, 2019 $45.46 $46.16 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 −2.86, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.86 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Deciphera Pharmaceuticals, Inc. is currently trading at $58.07/share, down −1.5% for the day. The company is trading at approximately 81.7% of its 52-week high of $71.11/share. The company’s stock price is up 20.0% since the last earnings report and down −9.4% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 49.24 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:DCPH Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −12.43 and a forward P/E multiple of −11.42.

Deciphera Pharmaceuticals, Inc.’s current share price also implies a price-to-book (P/B) multiple of 5.28. 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) $58.07
P/E Ratio −12.4x
P/E Ratio (Fwd) −11.4x
PEG Ratio 0.2
Total Debt / Total Capital 0.5%
Levered Free Cash Flow -$228.6 million
EV / EBITDA −9.8x

Finbox

Deciphera Pharmaceuticals, Inc. is a mid-cap stock with a market capitalization of $3.274 billion and a total enterprise value of $2.68 billion. The company operates in the Healthcare sector and the Biotechnology industry.

Deciphera Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, develops drugs to enhance the lives of cancer patients by addressing key mechanisms of drug resistance that limit the rate and durability of response of various cancer therapies. Its lead drug candidate is ripretinib for the treatment of gastrointestinal stromal tumors; and that is in Phase I trial for treating gliomas, melanoma, NSCLC/germ cell/penile, and soft tissue sarcomas. The company is also developing immunokinase inhibitors comprising DCC-3014 that is in Phase I trial for the treatment of tenosynovial giant cell tumors; and Rebastinib, which is in Phase Ib/II trial to treat solid tumors, as well as to investigate in combination with chemotherapy for the treatment of multiple solid tumors. In addition, its preclinical stage drug candidate is DCC-3116 for the treatment of RAS mutant cancers. Deciphera has partnership with K2fly, which offers cloud monitoring platform, to create an integrated monitoring and governance platform for tailing storage facilities. The company was founded in 2003 and is headquartered in Waltham, Massachusetts.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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