What happened
Avid Bioservices (CDMO 0.24%) hasn't been a very lively investment in recent days. According to data compiled by S&P Global Market Intelligence, the specialty healthcare company's stock was down 17% week to date as of early Friday morning. Uninspiring quarterly results combined with analyst price cuts to pull the stock earthward.
So what
Avid Bioservices, a contract developer and manufacturer of biologics, released its fiscal 2023 fourth-quarter results after market hours on Wednesday. It probably wishes it hadn't.
This, despite the fact the healthcare company posted record quarterly revenue of $39.8 million for the period, which ended April 30. That was up from $31.2 million in the same quarter of the previous fiscal year, and beat the average analyst estimate of $38.9 million.
On the bottom line, however, Avid Bioservices flipped dramatically (although not deeply) into the red, posting a slight loss according to GAAP standards of $309,000 (which rounds to $0.00 per share) against its profit of over $115 million in the prior-year period. Analysts had been expecting a modest net income result of $0.01 per share.
Compounding that, management proffered revenue guidance for the entirety of its fiscal 2024 that didn't come close to meeting expectations. The company is forecasting it will earn between $145 million and $165 million, but the average prognosticator's projection was over $181 million.
Now what
As analysts are wont to do in such situations, several quickly revised their Avid Bioservices price targets downward. Craig-Hallum's Matthew Hewitt shaved $3 off his to arrive at a new level of $22 per share, while Stephens pundit Jacob Johnson made a deeper cut to $20 from his preceding $24. Interestingly, both remain bullish on Avid Bioservices, as they maintained their equivalents of buy recommendations on the stock.
