Financial Advisors Focus on Small-Cap Biotech Intrexon as Its Stock Drops on Disappointing Q3 Results
The US stock market registered a decline last week, as all three main indexes plunged on Thursday on the back of concerns about the GOP tax plan, which pushed back the corporate tax reduction to 20% from 35% until 2019. In this way, Dow Jones Industrial Average lost 0.5% between November 6 and November 10, even though it managed to close at a record high on Tuesday. The S&P 500 lost 0.21%, offset by Priceline Group Inc (NASDAQ:PCLN), whose stock plunged on Tuesday following disappointing guidance the company provided in its third-quarter earnings report. The Nasdaq Composite inched down by 0.20%, helped by strong forecast for the fourth quarter posted by Take Two Interactive Software Inc (NASDAQ:TTWO), which created a rally among gaming stocks.
In the meantime, the third-quarter earnings season is almost over with over 90% of the companies in the S&P 500 having reported their results by November 10, according to FactSet. A total of 74% of the companies managed to beat the consensus EPS estimate and 66% of the companies reported better-than-expected revenue. At the same time, 28 companies in the S&P 500 provided positive EPS guidance for the current quarter and 58 companies issued negative guidance.
TrackStar, InvestingChannel’s official newsletter capturing and analyzing the trends of Financial Advisors, has compiled the list of 20 most searched tickers among Financial Advisors between November 5 and November 11. The list showed Apple keeping the leading position after the company posted solid results at the end of the previous week. Intrexon Corp (NYSE:XON) stood on the second spot as the company posted its financial results on November 9. General Electric Company (NYSE:GE) remained in the Financial Advisors’ spotlight, ranking on the third spot, as the stock continues its downward journey. Amazon.com, Inc. (NASDAQ:AMZN) ranked as the fourth most-searched ticker as the company is preparing to enter the holiday season and reduced prices on third-parties products. Walt Disney Co (NYSE:DIS) also ranked among the top 10 most searched tickers after the company reported its third-quarter earnings on Thursday and Cisco Systems, Inc. (NASDAQ:CSCO) made it among the top 10 as the company was scheduled to post its results on November 15.
As stated earlier, Intrexon Corp (NYSE:XON) was the second most-searched ticker according to TrackStar data, the reason being the company’s financial results, which proved to be rather disappointing, given that the stock plunged by over 25% on Friday. The company reported a net loss of $0.33 per share for the third quarter, missing the consensus estimate by $0.10, while its revenue of $46.02 million was 17% lower than expected. Moreover, the revenue slid by 6% on the year, which was the first quarterly revenue decline in 2017. Intrexon Corp (NYSE:XON) said the revenue declined due to lower product revenues, which fell by 17%, a decrease in R&D services for some of the company’s collaborations and smaller gross margins. Following the release of the third-quarter results, analysts at Bank of America reduced their price target on the stock to $21 from $25, maintaining a ‘Neutral’ rating.
Intrexon Corp (NYSE:XON) is a synthetic-biology company, which has an exciting portfolio of products, such as its proprietary methanotroph bioconversion platform, which the company said managed to increase its yield across multiple products during the third quarter. However, many of the company’s projects in agriculture and cancer treatment are still in early stages of trials. For example, Xogenex, Intrexon’s majority-owned subsidiary, has filed an Investigational NDA with the US Food and Drug Administration to begin Phase 1 trial of the gene therapy INXN-4001 for the treatment of heart disease. In agriculture, Intrexon has begun field trials of Oxitec’s solutions to suppress the diamondback moth. With so many projects under development, Intrexon Corp (NYSE:XON) is burning through cash, with third-quarter R&D spending growing by 26% on the year to $36.47 million, while SG&A expenses increased by 6% to 39.28 million.
At the same time, while Intrexon’s products attract a lot of interest, the company has failed to gain the investors’ confidence. In the last eight quarters, the company posted lower than expected EPS in seven quarters and revenue missed expectations in six quarters, although in most quarters, revenue showed year-over-year growth. Amid these results, the company’s shares have slid by more than 57% in the last 12 months. And if it doesn’t start showing stronger revenue, the situation is unlikely to change.