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Anika Therapeutics Shares Stunted By Increased Investment, Barrington Says In Downgrade

Anika Therapeutics Shares Stunted By Increased Investment, Barrington Says In Downgrade

Anika Therapeutics Inc (NASDAQ: ANIK)’s stock fell 3.4 percent Thursday after management reported a marginal top-line miss with mixed segment performances.

Shares continued to fall Friday on analyst criticism.

The Rating

Barrington Research analyst Michael Petusky downgraded Anika from Outperform to Market Perform in a Friday note with no assigned price target. 

The Thesis

Anika topped Barrington's estimates for earnings per share as well as revenue for both the dermal business and aggregate licensing and milestones. But Petusky attributed the bottom-line beat to a lower-than-expected tax rate, not internal improvements. (See the analyst's track record here.) 

Earnings before interest, taxes, depreciation and amortization; surgical and orthobiologics revenue; and gross margins all fell short of forecasts.

Petusky said he anticipates near-term gross-margin recovery considering the alleviation of temporary manufacturing issues, but the strain will not entirely dissipate.

“While we like this business and its management team a lot, we think the likely and meaningful near-term reduction in profitability (due to increased investment in the business in both 2018 and 2019) will probably put a cap on price appreciation potential for the next two to three quarters,” Petusky said. 

Price Action

At the time of publication, shares were trading down 13.27 percent at $50.05. 

Related Links:

Analyst: Don't Expect Anika's Latest FDA Cleared Treatment To Impact 2018

Pharma M&A Picks Up Momentum

Latest Ratings for ANIK

Jan 2020Sidoti & Co.UpgradesNeutralBuy
Nov 2019BWS FinancialInitiates Coverage OnSell
Sep 2019First AnalysisDowngradesStrong BuyOutperform

View More Analyst Ratings for ANIK
View the Latest Analyst Ratings


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Posted-In: Barrington Capital Barrington Research Michael PetuskyAnalyst Color Downgrades Analyst Ratings Best of Benzinga

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