Baird Lower Numbers on Dendreon (DNDN) But Says Restructuring the Right Move
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Price: $4.01 +1.01%
Rating Summary:
5 Buy, 15 Hold, 12 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Rating Summary:
5 Buy, 15 Hold, 12 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Trade DNDN Now!
Baird reiterated its Neutral rating on Dendreon (NASDAQ: DNDN) and cut its price target from $11 to $8 following weak Q2 results and restructuring news.
DNDN posted Q212 Provenge net revenue of $80M, below the consensus of $85M. Q212 EPS of ($0.65) versus the consensus of ($0.60) and Baird estimate of ($0.64). On the restructuring, by closing the NJ facility, DNDN expects to save
$150M annually, reduce COGS to <50% of product sales by Q412, and predicts breakeven at $400M annual revenue run-rate.
"With shares indicated at just above $5 post-close, (<3X current-year consensus revenue), we empathize with the tempted value investor," analyst Christopher J. Raymond states. "However, being a biotech, this name will first and foremost trade on revenue trends. And while we applaud management's tough decision to measurably shrink its corporate footprint, and think patience regarding the sales redeployment is warranted, we need to see tangible signs of commercial progress before again recommending the name."
The analyst said while restructuring is the right move, until they see more signs of revenue reacceleration continue to prefer watching from the sidelines.
For an analyst ratings summary and ratings history on Dendreon click here. For more ratings news on Dendreon click here.
Shares of Dendreon closed at $6.18 yesterday, with a 52 week range of $5.69-$37.72.
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DNDN posted Q212 Provenge net revenue of $80M, below the consensus of $85M. Q212 EPS of ($0.65) versus the consensus of ($0.60) and Baird estimate of ($0.64). On the restructuring, by closing the NJ facility, DNDN expects to save
$150M annually, reduce COGS to <50% of product sales by Q412, and predicts breakeven at $400M annual revenue run-rate.
"With shares indicated at just above $5 post-close, (<3X current-year consensus revenue), we empathize with the tempted value investor," analyst Christopher J. Raymond states. "However, being a biotech, this name will first and foremost trade on revenue trends. And while we applaud management's tough decision to measurably shrink its corporate footprint, and think patience regarding the sales redeployment is warranted, we need to see tangible signs of commercial progress before again recommending the name."
The analyst said while restructuring is the right move, until they see more signs of revenue reacceleration continue to prefer watching from the sidelines.
For an analyst ratings summary and ratings history on Dendreon click here. For more ratings news on Dendreon click here.
Shares of Dendreon closed at $6.18 yesterday, with a 52 week range of $5.69-$37.72.
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Robert W Baird
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