SpringWorks Therapeutics (SWTX) Surges 14.5% Post Earnings: What's Next?

SpringWorks Therapeutics (SWTX) has seen a notable increase of 14.5% in its stock price since its last earnings report, outperforming the S&P 500. Investors are now keen to understand whether this upward trend can be sustained as the company approaches its next earnings release.

Key Takeaways

• SpringWorks reported a narrower loss of 72 cents per share in Q3 2024, compared to a loss of $1.27 per share in the same quarter last year.
• Total revenues for the quarter were $49.3 million, missing the Zacks Consensus Estimate of $54 million.
• Net product revenues from Ogsiveo increased by nearly 23% sequentially, reflecting strong demand.
• Research and development expenses rose to $42.3 million, while selling, general, and administrative expenses reached $61.6 million.
• The company has a cash balance of $498.1 million, expected to fund operations until profitability in 2026.

Earnings Report Overview

In its latest earnings report, SpringWorks Therapeutics revealed a loss of 72 cents per share for the third quarter of 2024. This figure was better than analysts' expectations, which had estimated a loss of 76 cents per share. In contrast, the company had reported a significantly larger loss of $1.27 per share in the same quarter the previous year.

Despite the narrower loss, total revenues of $49.3 million fell short of the Zacks Consensus Estimate of $54 million. This revenue primarily stemmed from net product sales of Ogsiveo, which has shown promising growth since its launch.

Revenue Growth

The increase in net product revenues from Ogsiveo was a highlight, with a sequential growth of almost 23%. This surge is attributed to a successful commercial launch and heightened demand for the drug, indicating a positive reception in the market.

Expense Analysis

SpringWorks reported research and development expenses totaling $42.3 million, marking a 12.8% increase from the previous year. This rise is largely due to higher costs associated with drug manufacturing and ongoing clinical studies.

Additionally, selling, general, and administrative expenses reached $61.6 million, reflecting a year-over-year increase of approximately 32.5%. This increase is primarily linked to the costs incurred in supporting the launch of mirdametinib in the U.S., pending potential approval.

Financial Position

As of September 30, 2024, SpringWorks had cash, cash equivalents, and marketable securities amounting to $498.1 million, down from $521.9 million as of June 30, 2024. Management has indicated that this cash balance is expected to sustain the company until it reaches profitability, projected for the first half of 2026.

Market Outlook

Despite the recent positive performance, estimates for SpringWorks Therapeutics have trended downward over the past month. The company currently holds a Zacks Rank of #3 (Hold), suggesting that investors can expect an in-line return in the coming months.

The stock has a Growth Score of B and a Momentum Score of A, indicating potential for growth. However, it received an F on the value side, placing it in the lowest quintile for this investment strategy. Overall, the aggregate VGM Score stands at C, which is a balanced indicator for investors not focused on a single strategy.

As SpringWorks Therapeutics prepares for its next earnings report, market participants will be closely monitoring its performance and any developments that could influence its stock trajectory.

Sources

• SpringWorks Therapeutics (SWTX) Up 14.5% Since Last Earnings Report: Can It Continue?, Yahoo.