Better Days Are on the Horizon for Aurinia Stock, Says Analyst

Usually, biopharma stocks are inclined to surge or crash based on regulatory decisions or the outcome of clinical trials. More unusual is for shares of one to crater due to Read More... The post Better Days Are on the Horizon for Aurinia Stock, Says Analyst appeared first on TipRanks Financial Blog.

Better Days Are on the Horizon for Aurinia Stock, Says Analyst

Usually, biopharma stocks are inclined to surge or crash based on regulatory decisions or the outcome of clinical trials. More unusual is for shares of one to crater due to disappointing quarterly results, but that’s the price of already having a treatment available on the market that unfortunately is underperforming.

Which brings us to Aurinia Pharmaceuticals (). The Street was not pleased when the company reported its first-quarter earnings last week, after the sales of Lupkynis, Arurinia’s treatment for autoimmune kidney disease lupus nephritis (LN), came in below expectations. Shares dropped by 18% in the subsequent session, and are now trading at 52-week lows.

Sales in the quarter hit $0.9 million, far below the consensus estimate of $3 million. However, Leerink analyst Joseph Schwartz thinks there are mitigating circumstances for the underperformance.

“As we recently outlined, we tapered our near-term sales projections, given COVID-related headwinds and delays in prescription fulfillment dynamics. Further, as Lupkynis was only approved on January 22nd, the sales reported for 1Q21 only represent approx. 8 weeks of commercialization,” Schwartz said. “While sales missed both our estimates and consensus, we believe the $0.9M figure still represents a respectable first partial quarter of sales, given the difficulty of launching a new drug during an ongoing pandemic.”

Although management had planned for pandemic-related headwinds, during the last three months, Covid-19 has been particularly disruptive for LN patients. A recent World Lupus Federation report showed that 50% of those surveyed noted the increased difficulty in getting access to “at least one aspect of lupus healthcare.”

However, Schwartz anticipates the issue to subside and expects Aurinia’s 150-person sales team will be out and about more often as the national rollout of vaccines progresses.

The company said it has already engaged with over 6,000 rheumatologists and nephrologists, which has resulted in 257 patient start forms, and after the drug’s first two months on the market, 40% of those patients were already getting treated.

The early progress is “encouraging,” says the analyst, who notes that management has said the areas where there are less Covid restrictions are those with the most interactions and prescription activity. As such, Schwartz thinks sales of $66.5 million are “attainable” in FY21.

Schwartz also thinks there are big gains in store for AUPH stock. He puts a $28 target price on the shares, indicating one-year upside of 180%. Needless to say, Schwartz rates AUPH an Outperform (i.e. Buy). (To watch Schwartz’ track record, )

The Street’s average price target is only a fraction beneath Schwartz’s, and at $27.40, suggests gains of 174% are on the 12-month horizon. The analysts’ confidence in Aurinia is confirmed by a Strong Buy consensus rating, based on a unanimous 5 Buys. (See AUPH stock analysis on TipRanks)

To find good ideas for biotech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The post Better Days Are on the Horizon for Aurinia Stock, Says Analyst appeared first on TipRanks Financial Blog.

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Scoop up Peloton Shares on Discount, Says Analyst

Last week was a newsworthy one for Peloton (PTON). The home exercise specialist hogged the headlines after recalling not only the Tread+ but also its other treadmill, the Tread. The move Read More... The post Scoop up Peloton Shares on Discount, Says Analyst appeared first on TipRanks Financial Blog.

Scoop up Peloton Shares on Discount, Says Analyst

Last week was a newsworthy one for Peloton (). The home exercise specialist hogged the headlines after recalling not only the Tread+ but also its other treadmill, the Tread. The move amounted to a U-turn after the company previously refuted a U.S. Consumer Product Safety Commission’s (CPSC) report that claimed the Tread+ was unsafe following 39 injury incidents involving the product in addition to one child’s death.

The fact the announcement came only a day before the release of Peloton’s March quarter (F3Q210) earnings added an extra layer of spice to the announcement of the financials.

While the fallout from the saga will have to be dealt with, Peloton’s latest quarterly statement suggested the company has enough in reserves to please those taking the long-term view.

Revenue increased by 140.2% year-over-year to $1.26 billion while also handsomely beating the Street’s estimate by $140 million. EPS of -$0.03 came in ahead of the Street’s forecast by $0.10. Paid Digital Subscriptions surged by a hefty 404% to around 891,000, while Connected Fitness Subscriptions increased by 135% to over 2.08 million. Looking to FQ4, Peloton expects the treadmill recall to cost the company $165 million.

Possibly using an unfortunate turn of phrase, Canaccord analyst Michael Graham calls the quarter “full of moving parts.” However, Graham is full of praise for Peloton, and hails the company’s “impressive” business momentum and “better-than-expected profitability.” Moreover, looking at the bigger picture, the analyst thinks the recent issues could provide investors with an alluring opportunity.

“While the Tread & Tread+ recall news is causing volatility, the quality of management's response to the issue is reassuring, with appropriate reserves and extra expenses built into guidance to ensure a robust, brand-supporting response,” the 5-star analyst said. “The next two quarters take us through the initial response period for the recall and the seasonally slow summer months, and we suspect that at some point during this time period investors should have a compelling opportunity to purchase an enduring, market-defining subscription business at a discount from recent highs.”

Further down the line, from F2Q22 onwards, Graham counts “greater manufacturing capacity, meaningful marketing spend, and what should be an expanded product offering to help build leadership across cardio and strength,” as reasons to believe strong long-term growth is in the cards.

In tandem with low churn and high operating leverage, Graham believes this growth makes Peloton “an attractive growth investment vehicle.”

To this end, Graham rates PTON shares a Buy along with a $150 price target. The figure is an attractive one for investors, implying ~71% potential gains. (To watch Graham’s track record, )

Turning now to the rest of Street, where most are on the same page. The stock’s Moderate Buy consensus rating is based on 17 Buys vs. 4 Holds and 1 Sell. While not quite as exuberant as Graham’s objective, the $134.32 average price target suggests upside of ~54% in the year ahead. (See PTON stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The post Scoop up Peloton Shares on Discount, Says Analyst appeared first on TipRanks Financial Blog.

Source : Tip Ranks More   

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