Cryoport (CYRX) Volatile in Wake of Preliminary Q4 Earnings Report
Shares of Cyroport (CYRX) have traded all over the map today after the company reported preliminary Q4 results that came in lighter than expected. Management says it sees Q4 revenue of $9.2 million (up 61%) versus expectations of $10.4 million, and that full-year 2019 revenue would be around $33.9 million (up 73%) versus $35.1 million expected. Official results will come out on March 5.
The stock closed yesterday around 18 and is trading around 16.6 in the early afternoon, after dipping as low as 14 earlier. At its current price CYRX is up roughly 19% from our entry point.
What should you do now? Nothing.
I don’t think it’s wise to double up on a stock that has pre-released results below expectations since we don’t know details beyond what was in the press release. The official report date is still two months away. That’s a long time to wait.
I also don’t think it’s time to sell today. Let things settle down and see where the stock finishes the day. I suspect a lot of the downside move was a combination of computer trading and knee jerk reactions that came as a result. This is a small company (market cap of just $600 million) and is expected to be volatile, at times.
The trend throughout today is that the stock bottomed early in the session, bounced higher, stabilized, then has been steadily recovering. That’s a sign that buyers are moving in.
Let’s do what we all want to and speculate for a moment on the earnings report. I suspect the “miss” is mostly due to timing and changes in clinical trials that the company is supporting. Quarterly revenue of just over $9 million makes Cryoport a pretty small business and it doesn’t take much to affect things. Management noted 12 new clinical trials being supported in Q4 (for a total of 436) but that two high-volume trials failed to meet their endpoints, and several others transitioned to new phases or prepared to move to commercial status. As I said, timing.
I think we just have a small business here that experiences fluctuations in sales, which are relatively small to begin with, and management wanted to get the Q4 news out early to be transparent. I think that was the right call.
Taking it all together, none of this screams sell now, but it also doesn’t necessarily mean we want to keep holding the stock. It totally depends on how CYRX acts in the near term. I want to see where it ends today, and how it acts at the beginning of next week.
In the meantime, do nothing. We will act based on the stock’s action. Accordingly, CYRX moves to HOLD.