Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) is set to report FQ4 2013 earnings before the market opens on Tuesday, February 11th. Regeneron Pharmaceuticals is an American biotechnology company which originally focused on neurotrophic factors and their regenerative capabilities. Current drugs include EYLEA, which can treat a common cause of blindness in the elderly, ARCALYST, which treats Cryopyrin-Associated Periodic Syndromes, and ZALTRAP, for metastatic colorectal cancer. Regeneron is currently developing several drugs in partnership with Sanofi (NYSE:SNY), one of which is called dupilumap which is designed to treat atopic diseases such as atopic dermatitis. Sanofi has been bullish with its expectations for the drug and although its release is still a few years down the road, analyst expectations for the present quarter are high even without it. Here's how investors expect Regeneron Pharmaceuticals to report this quarter.
The information below is derived from data submitted to the Estimize.com platform by a set of Buy Side and Independent analyst contributors.
The current Wall Street consensus expectation is for REGN to report 99c EPS and $579.92M revenue, while the current Estimize.com consensus from Buy Side and Independent contributing analysts is $1.48 EPS and $591.22 revenue. This quarter the buy-side as represented by the Estimize.com community is expecting REGN to beat the Wall Street consensus on both EPS and revenue by a wide margin.
Throughout the previous 4 quarters the consensus from Estimize.com has been more accurate than Wall Street in forecasting REGN's profit in each quarter and has been more accurate in predicting revenue 3 times. By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non professional investors Estimize has created a data set that is up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market's actual expectations. It has been confirmed by an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus.
The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case we are seeing a large differential compared to previous quarters.
The distribution of estimates published by analysts on the Estimize.com platform range from $1.10 to $1.16 EPS and $570.00M to $597.00M in revenues. This quarter we're seeing a wide range of estimates on EPS but a tight range for revenue.
The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wider distribution of estimates signaling less agreement in the market, which could mean greater volatility post earnings. In this case because the range of estimates for EPS is so wide, we could see increased volatility in the wake of the earnings release.
Throughout the quarter the EPS consensus from Wall Street decreased from $1.04 to 99c, while the Estimize consensus shot up from $1.39 to $1.48. Over the same time period Wall Street raised its revenue expectation from $538.91M to $579.92M while the Estimize forecast pushed slightly higher from $589.74M to $591.22M. Timeliness is correlated with accuracy and increasing analyst revisions going into a report are often a bullish indicator.
The analyst with the highest estimate confidence rating this quarter is dtamv who projects $1.105 EPS and $595.00M in revenue. In the Winter 2014 season dtamv rated as the 168th best analyst and is ranked 686th overall among over 3,800 contributing analysts. Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case dtamv is expecting Regeneron Pharmaceuticals beat the Estimize.com consensus on revenue but only report slightly ahead of Wall Street on profit.
Although dupilumap may still be a few years down the road Regeneron has demonstrated its ability to consistently beat Wall Street expectations and this quarter contributing analysts on the Estimize.com platform expect them to do it again. EYLEA, ARCALYST, and ZALTRAP will lead the way for now but drugs in the development pipeline including dupilumap and alirocumab, the first antibody designed to treat high cholesterol, have analysts bullish about Regeneron's future.