What happened
Avid Bioservices (CDMO 0.41%) 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 GAAP loss 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 that 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.
