Ameliorating Prospects For Opko Health; What To Expect From Earnings And Beyond

Shares of Opko Health Inc. OPK gained almost 1.5 percent on Monday morning, in anticipation of the announcement of the company’s first quarter financial results after the market closes.

According to Estimize, experts and the crowd expect to see a reduction in the company’s net loss, both in relation to the same quarter of last year and to the last quarter.

For the first quarter of 2014, the company reported a wider-than-expected loss of ($0.11) per share on revenue of $22.3 million. For the last quarter, the biopharmaceutical enterprise posted an even larger net loss, of ($0.12) per share on revenue of $25.5 million.

For the first quarter of 2015, the Street models a consensus net loss of ($0.08) per share on revenue of $27.21 million. The crowd is slightly more bearish, and projects a net loss of ($0.09) per share on revenue of $25.33 million. The chart below features a history of Opko Health’s actual earnings compared to estimates.

As it can be observed, there is no clear trend here.

A second graph (below) illustrates the evolution of consensus estimates over time.

As it can be appreciated, while the Street’s expectations have been falling since the beginning of the year, the crowd’s sentiment fell, then rose, and then went right back to the starting point of ($0.09) per share.

Opposing Views

In a recent report, analysts at Barrington Research assumed coverage on Opko Health with an Outperform rating and $19.00 price target. They explained: "We are assuming coverage of OPKO Health due to an analyst transition. Headquartered in Miami, Florida OPKO primarily focuses on point-of-care diagnostics, novel molecular diagnostics, and pharmaceuticals...Led by long-time healthcare executive Phillip Frost, OPKO has many additional shots on goal even beyond the opportunities within its currently commercialized product portfolio and its front-burner pipeline products, Rayaldee, and hGH-CTP. We have included information on pages 2 and 3, which illustrates key aspects of the current product portfolio as well as the depth of the product pipeline."

In addition, David Miller, Senior Portfolio Manager of the Catalyst Insider Buying Fund and the Catalyst Small-Cap Insider Buying Fund, also recommended Opko recently.

Related Link: Are There Any Small-Cap Gems In Health Care?

Despite an impressive rally over the past months, CEO Phillip Frost, M.D. continues to buy stock, “a telling signal of the potential upside still left in Opko,” Miller says.

On the other hand, analysts at Oppenheimer recently downgraded the drug and diagnostics company from Outperform to Market Perform in account of excessively high investor expectations.