Repligen (RGEN) Down 10.9% Since Last Earnings Report: Can It Recover?

It has been about a month since Repligen (RGEN) last reported earnings. Shares have lost about 10.9% in that time, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Repligen waiting for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to better understand the important catalysts.

Repligen’s first quarter results are not satisfactory, with revenues exceeding estimates

Repligen reported first-quarter 2024 adjusted earnings per share of 28 cents, missing the Zacks Consensus Estimate of 29 cents. In the same quarter last year, the company reported adjusted earnings per share of 64 cents per share.

Total revenues were $151.3 million, down 17.2% year over year on a reported basis and 20% organic. However, revenues topped the Zacks Consensus Estimate of $150 million.

The year-over-year decline in total revenues can be attributed to the lack of Covid-19-related revenues and the expected decline in revenues from protein franchisees.

Quarter in detail

The company reported product revenue of $151.3 million, down 17.1% from the year-ago period. It also reported royalty and other revenues of $0.04 million, almost flat year-over-year.

Repligen’s core business revenues of $145 million declined 9.4% year-over-year due to an expected decline in protein business revenues due to lower affinity ligands and resin demand.

The company’s core activities can be divided into four branches – filtration, chromatography, protein analysis and process.

Revenues from the chromatography business increased slightly on a sequential basis. RGEN expects continued revenue improvement in the second quarter as the chromatography industry continues to recover from resin shortage challenges.

Filtration franchise sales increased over 10% year-over-year, while non-COVID filtration revenue increased over 15% sequentially, driven by ATF’s success.

Revenues at the protein franchise declined both year-over-year and sequentially due to weak demand reflecting the decline of Cytiva (a stand-alone operating company of Danaher Corporation) as it produces products in-house, and lower forecast levels for ligands from other customers.

Although the analytics business had a slow start in the first quarter, Repligen continues to see strong demand for FlowVPX and real-time process management, or RPM, driving growth for this business unit.

The company’s revenue from its emerging therapeutics business, which includes cell and gene therapy and mRNA, grew more than 15% year-over-year in the reported quarter.

The newly acquired Metenova generated revenues of over $5 million in the first quarter of 2024, in line with management expectations.

Adjusted gross margin was 48.6% in the first quarter, down 60 basis points year over year.

Adjusted research and development expenses were approximately $11 million, down nearly 9.8% from the prior-year quarter level.

Adjusted selling, general and administrative expenses were $50.8 million, up 6.3% year-over-year.

Adjusted operating income was $11.8 million, down nearly 71% from the prior-year quarter.

As of March 31, 2024, Repligen had cash and cash equivalents of $780.6 million compared to $751.3 million as of December 31, 2023.

Guidelines 2024

Repligen reiterated guidance it provided earlier this year. The company expects total revenues of $620 million to $650 million in 2024. Adjusted EPS is expected to be between $1.42 and $1.49 in 2024.

The company expects core operating revenue to decline 1% to 4% in 2024.

Adjusted net income is estimated in the range of $80-84 million. Adjusted operating income is expected to be in the range of $83 million to $88 million.

Repligen expects adjusted gross margin to be in the range of 49. Adjusted operating margin is expected to be in the range of 13.

How have estimates changed since then?

It turns out that the estimates have not changed in the last month.

VGM results

Right now, Repligen has a weak Growth Score of F, but its Momentum Score is doing much better at B. However, the stock is rated D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has a Total VGM Score of D. If you’re not focused on one strategy, this score should interest you.

Perspectives

Repliken has a Zacks Rank of #3 (Hold). We expect a linear rate of return on the stock over the next few months.

Industry player performance

Repligen belongs to the Zacks Medical – Biomedical & Genetics industry. Another company in the same industry, Biogen Inc. (BIIB), has gained 3.1% over the past month. More than a month has passed since the company announced its results for the quarter ended March 2024.

In the most recent quarter, Biogen reported revenue of $2.29 billion, representing a -7% year-over-year change. EPS of $3.67 in the same period compared to $3.40 a year ago.

For the current quarter, Biogen is expected to report earnings per share of $3.98, representing a -1% change from the prior-year quarter. The Zacks Consensus Estimate has changed +0.1% over the past 30 days.

The overall direction and magnitude of estimate revisions translates into a Zacks Rank #3 (Hold) for Biogen. The stock also has a VGM Rating of B.

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