Novocure (NVCR) Stock Tanks On Earnings: Is It An Opportunity?

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Novocure Ltd (NASDAQ: NVCR)

Novocure is having a tremendously rough day in the market today, and for good reason. The company missed earnings in a big way. However, given recent news, these declines might just present an opportunity. Today, we’ll talk about earnings, how the stock is reacting to the news, and the possible opportunity that may be right in front of us with NVCR.

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NVCR Releases Disappointing Earnings

As mentioned above, NovoCure is having an exceptionally hard day in the market today after releasing its results for the most recent quarter. While the company topped revenue expectations, earnings proved to be a big miss. Here’s what we saw:

  • Earnings Per Share – In terms of earnings per share, NVCR missed the mark in a big way. During the quarter, analysts expected that the company would generate a loss of $0.37 per share. However, the company actually reported that the loss came in at $0.48 per share. This figure missed the mark in a big way.
  • Revenue – While earnings proved to be a disappointment, NVCR actually did pretty well when it came to revenue. During the quarter, analysts expected that the company would generate revenue in the amount of $15.90 million. However, the company actually generated revenue in the amount of $17.90 million for the quarter.

How The Market Reacted To The News

While revenue proved to be positive, the miss on earnings was just too much for investors. As a result, we’ve watched Novocure stock fall throughout the trading session so far. Currently (1:06), the stock is trading at $8.48 per share after a loss of $2.96 per share (25.87%) thus far today.

Is This An Opportunity

Let’s face it, earnings was overwhelmingly negative, and the declines we’re seeing today are justified if we look at only that aspect. However, with recent news, this thing really could be creating a compelling opportunity. After all, just two days ago, NVCR announced that the National Comprehensive Cancer Network recommended Optune as a standard treatment option for newly-diagnosed glioblastoma (GBM). The implications of this recommendation can be massive! In a statement, Dr. Eilon Kirson, Chief Science Officer and Head of Research and Development at Novocure, had the following to say:

The NCCN Guidelines aim to assist patients, their families and their medical teams in making informed treatment-related decisions with the goal of optimal cancer care…We believe the inclusion of Optune as a standard treatment option for newly diagnosed GBM serves as further validation of this noninvasive cancer therapy that has been shown to extend survival in newly diagnosed GBM.”

The above statement was followed up by Pritesh Shah, SVP of the Americas arm at NVCR. Here’s what he had to say:

Physicians look to the NCCN guidelines as the standard resource when determining the best course of treatment for patients… Optune’s inclusion as a recommended treatment for newly diagnosed GBM will help us to educate more physicians in the community setting, where newly diagnosed GBM patients are often treated. Increased physician awareness will help us to reach patients earlier in the course of this aggressive disease, which should translate to better outcomes.”

The Bottom Line

The bottom line here is that, yes, earnings were horrible. However, given the news surrounding Optune, the stock is likely to explode in the long run anyway. With the NCCN recommendation, we’re likely to see sales of Optune climb in a big way, strengthening revenue and bringing NVCR to profitability.

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What Do You Think?

Where do you think NVCR is headed? Join the discussion at TalkTRENDZ!

[Image Courtesy of Wikimedia]

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