What’s in Store for Intrexon (XON) This Earnings Season?


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Intrexon Corporation XON is expected to report fourth-quarter 2017 results on Mar 1, after the market closes .

Last quarter, the company delivered a positive earnings surprise of 9.09%. Intrexon has a mixed surprise history. Over the trailing four quarters, the company surpassed estimates twice while trailing in two, with an average beat of 1.71%.

Intrexon’s shares have tumbled 42.2% over an year, underperforming the industry ‘s gain of 0.7%.

Factors to Consider

Intrexon’s business model helps it commercialize technologies through exclusive channel collaborations (“ECC”), licensing agreements and joint ventures with collaborators that have market and product development expertise as well as sales and marketing capabilities. This facilitates the company to bring new and improved products and processes in the market. These agreements help Intrexon generate funds in the form of technology access fees and milestones, along with other payments.

Intrexon is collaborating with various companies for developing several candidates. The company teamed up with Fibrocell Science, Inc. FCSC and completed enrolment in a phase I/II study on FCX-007 for recessive dystrophic epidermolysis bullosa. In September 2017, the company reported interim results on FCX-007. Data showed that FCX-007 was well tolerated through 12 weeks post-administration. In January 2018, Fibrocell received an approval from the FDA to initiate enrollment of pediatric patients in the phase II portion of the phase I/II study of FCX-007.

Also, the second gene therapy candidate, FCX-013, is being developed by Fibrocell for the treatment of linear scleroderma.

Intrexon’s expanding portfolio of technologies has enabled the company to develop a robust pipeline. The company’s efforts to growth by acquisitions and ECCs are encouraging. Therefore, we expect investor’s focus to remain on the company’s performance along with other developmental updates during the quarterly call.

What Our Model Indicates

Our proven model does not conclusively show an earnings beat for Intrexon this quarter. This is because a stock needs to have both – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) – to surpass estimates. That is not the case here, as you will see below.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -3.90%. This is because both the Most Accurate estimate is pegged at a loss of 32 cents while the Zacks Consensus Estimate stands at a loss of 31 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter .

Zacks Rank: However, Intrexon has a Zacks Rank #3 which increases the predictive power of ESP. However, we need to have a positive ESP to be confident of an earnings beat.

Note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Intrexon Corporation Price and EPS Surprise

Intrexon Corporation Price and EPS Surprise | Intrexon Corporation Quote

Stocks to Consider

Here are some health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Gemphire Therapeutics GEMP is expected to release fourth-quarter 2017 results on Mar 21. The company has an Earnings ESP of +8.01% and a Zacks Rank #2.

Atara Biotherapeutics ATRA is expected to release fourth-quarter 2017 results on Mar 8. The company has an Earnings ESP of +7.42% and a Zacks Rank #3.

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Fibrocell Science Inc (FCSC): Free Stock Analysis Report

Atara Biotherapeutics, Inc. (ATRA): Free Stock Analysis Report

Gemphire Therapeutics Inc. (GEMP): Free Stock Analysis Report

Intrexon Corporation (XON): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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