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Ocular Therapeutix Q3 Earnings: Buying Soaring NasdaqGM:OCUL Stock Before Call?

in EARNINGS/INVESTING IDEAS by

Ocular Therapeutix, Inc. (NasdaqGM:OCUL) is scheduled to report Q3 earnings results on November 5, 2020.

The company is expected to report earnings of -$0.25/share on revenue of $5.859 million. The consensus earnings per share (EPS) of -$0.25/share is based on a poll of 3 analysts and represents a growth in eps of 45.2% over the same quarter last year, when the company reported earnings of -$0.45/share.

The revenue forecast of $5.859 million based on a poll of 4 analysts implies a year-over-year (YoY) growth in revenue of 606.8%. Last year the company reported $829 thousand in revenue for the quarter.

Expected to report EPS of -$0.25/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $5.86 $0.83 606.8%
EPS -$0.25 -$0.45 45.2%

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.32 -$0.64 -97.9% Missed
Q1, 2020 -$0.49 -$0.41 17.2% Beat
Q4, 2019 -$0.42 -$0.53 -26.2% Missed
Q3, 2019 -$0.46 -$0.45 2.2% Beat
Q2, 2019 -$0.48 -$0.57 -17.9% Missed
Q1, 2019 -$0.41 -$0.41 0% Met
Q4, 2018 -$0.38 -$0.42 -9.4% Missed
Q3, 2018 -$0.37 -$0.38 -2.7% 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 falling −3.0%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 7, 2020 $8.46 $8.21 −3.0% Decline
May 8, 2020 $6.64 $5.97 −10.1% Decline
March 12, 2020 $5.35 $4.74 −11.4% Decline
November 12, 2019 $2.93 $2.77 −5.5% 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 0.31, the model suggests that the company is likely an earnings manipulator. A value of 0.31 implies a 38.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Ocular Therapeutix, Inc. is currently trading at $9.50/share, up 0.1% for the day. The company is trading at approximately 76.5% of its 52-week high of $12.42/share. The company’s stock price is up 15.7% since the last earnings report and down −6.7% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 44.99 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGM:OCUL Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −6.59 and a forward P/E multiple of −8.31.

Ocular Therapeutix, Inc.’s current share price also implies a price-to-book (P/B) multiple of 126.80. 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) $9.50
P/E Ratio −6.6x
P/E Ratio (Fwd) −8.3x
PEG Ratio 0.5
Total Debt / Total Capital 8.3%
Levered Free Cash Flow -$74.055 million
EV / EBITDA −8.6x

Finbox

Ocular Therapeutix, Inc. is a small-cap stock with a market capitalization of $677.6 million and a total enterprise value of $654.3 million. The company operates in the Healthcare sector and the Pharmaceuticals industry.

Ocular Therapeutix, Inc., a biopharmaceutical company, focuses on the formulation, development, and commercialization of therapies for diseases and conditions of the eye using its bioresorbable hydrogel platform technology. The company markets ReSure Sealant, a hydrogel ophthalmic wound sealant to seal corneal incisions following cataract surgery. Its lead product candidate is DEXTENZA (dexamethasone ophthalmic insert), which has completed two Phase III clinical trials for the treatment of post-surgical ocular pain and inflammation, and allergic conjunctivitis; and DEXTENZA, which is in Phase III clinical trials for the treatment of dry eye diseases. The company also develops OTX-TP (intracanalicular travoprost insert), which is in Phase III clinical trials for the reduction of intraocular pressure (IOP) in patients with glaucoma and ocular hypertension; OTX-TIC, an intracameral travoprost implant, which is in Phase I clinical trials for the reduction of IOP in patients with moderate to severe glaucoma and ocular hypertension; OTX-TKI, an intravitreal tyrosine kinase inhibitor implant, which is in Phase I clinical trials for the treatment of wet age-related macular degeneration(AMD). Its various preclinical programs include OTX- BPI for the treatment of acute ocular pain; OTX-BDI to treat post-operative Pain, and inflammation and bacterial infection; OTX-CSI to treat dry-eye disease; and OTX-IVT, an intravitreal aflibercept implant for the treatment of wet AMD and other back-of-the-eye diseases. The company has strategic collaboration with Regeneron Pharmaceuticals, Inc. (Regeneron) for the development and commercialization of products using the Company’s sustained-release hydrogel in combination with Regeneron’s large molecule VEGF-targeting compounds for the treatment of retinal diseases. Ocular Therapeutix, Inc. was founded in 2006 and is headquartered in Bedford, Massachusetts.

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