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Q3 Earnings Preview for Concert Pharmaceuticals (NasdaqGM:CNCE)

in EARNINGS/INVESTING IDEAS by

Concert Pharmaceuticals, Inc. (NasdaqGM:CNCE) is scheduled to report Q3 earnings results before markets open for trading on November 5, 2020.

The company is expected to report earnings of -$0.76/share on revenue of zero. The consensus earnings per share (EPS) of -$0.76/share is based on a poll of 4 analysts and represents a decline in eps of -5.2% over the same quarter last year, when the company reported earnings of -$0.72/share.

The revenue forecast of zero based on a poll of 4 analysts implies a year-over-year (YoY) growth in revenue of -. Last year the company reported $10 thousand in revenue for the quarter.

Expected to report EPS of -$0.76/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $0.00 $0.01
EPS -$0.76 -$0.72 -5.2%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, and missed expectations 4 quarters.

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.70 -$0.41 41.6% Beat
Q1, 2020 -$0.77 -$0.70 8.8% Beat
Q4, 2019 -$0.79 -$0.86 -9.5% Missed
Q3, 2019 -$0.84 -$0.72 14.5% Beat
Q2, 2019 -$0.91 -$0.78 14.3% Beat
Q1, 2019 -$0.65 -$0.93 -43.0% Missed
Q4, 2018 -$0.74 -$0.89 -20.1% Missed
Q3, 2018 -$0.62 -$0.74 -18.4% 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 3.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $9.56 $9.86 3.1% Increase
April 30, 2020 $11.34 $8.36 −26.3% Decline
February 27, 2020 $10.92 $8.46 −22.5% Decline
November 7, 2019 $6.40 $6.73 5.2% 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 3.65, the model suggests that the company is likely an earnings manipulator. A value of 3.65 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Concert Pharmaceuticals, Inc. is currently trading at $10.32/share, down −3.9% for the day. The company is trading at approximately 78.8% of its 52-week high of $13.09/share. The company’s stock price is up 4.7% since the last earnings report and down −13.4% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 39.28 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGM:CNCE Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −4.31 and a forward P/E multiple of −3.76.

Concert Pharmaceuticals, Inc.’s current share price also implies a price-to-book (P/B) multiple of 2.13. 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) $10.32
P/E Ratio −4.3x
P/E Ratio (Fwd) −3.8x
PEG Ratio −0.2
Total Debt / Total Capital 4.9%
Levered Free Cash Flow -$63.599 million
EV / EBITDA −2.5x

Finbox

Concert Pharmaceuticals, Inc. is a small-cap stock with a market capitalization of $306.3 million and a total enterprise value of $175.2 million. The company operates in the Healthcare sector and the Biotechnology industry.

Concert Pharmaceuticals, Inc. operates as a clinical stage biopharmaceutical company. The company discovers and develops novel small molecule drugs for use in the treatment autoimmune and central nervous systems disorders. Its product candidates include AVP-786, a combination of deudextromethorphan and an ultra-low dose of quinidine, which is in Phase 3 clinical trials for the treatment of neurologic and psychiatric disorders, including agitation associated with Alzheimer’s disease; and CTP-543, which is in Phase 1 clinical trials for use in the treatment of alopecia areata. The company is also developing CTP-692, a selective deuterium-modified analog of the endogenous amino acid, D-serine, which is in preclinical studies for use in the treatment of patients with schizophrenia. It has strategic collaborations with Celgene International Sarl; Celgene Corporation; Avanir Pharmaceuticals, Inc.; and Jazz Pharmaceuticals, Inc. The company also have license agreement with Cipla Technologies. Concert Pharmaceuticals was founded in 2006 and is headquartered in Lexington, Massachusetts.

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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