Third-quarter earnings reports are rolling in, and there were a couple reports this week that were interesting, including one that was my "top pick" back in April.
That would be pharma value play Viatris (VTRS) , which has been relatively unloved by investors but put up decent numbers on Monday. Earnings per share of 87 cents were three cents ahead of estimates, while revenue of $4.07 billion missed by $ 70 million. That's the seventh consecutive earnings beat by Viatris, which sounds good, but it's all relative. Viatris shares are down about 22% year to date, with the greatest damage done back on Feb. 28, when they fell 24% to a 52-week low after Viatris reported lower-than expected guidance.
Viatris currently trades at about 3x 2023 and 2024 consensus earnings estimates, so expectations remain very low. The current dividend yield is a fairly compelling 4.32%. The net debt load, at $19.3 billion, remains a concern and a weight on the stock, but that's down from $22.6 billion year over year.
A more speculative name, footwear company Allbirds (BIRD) , which went public last November and in my view is a busted IPO, reported on Tuesday. Third-quarter revenue of $72.7 million was about $5 million ahead of the consensus, while the loss of 15 cents a share was better than the consensus by two cents. Allbirds ended the quarter with cash of $181 million, or $1.21 per share, and no debt. Allbirds shares currently trade at 1.67x net current asset value (NCAV).
Allbirds is down 81% from its $15 initial public offering price and down 90% from its closing high price and has been a huge disappointment in its still early existence as a publicly traded company. The younger set, including our children and their peers, rave about the brand and its products, but that hasn't translated into profitability, which still may be years away, and BIRD shares are price accordingly.
Busted IPOs can be fun, and while this was a somewhat encouraging quarter for BIRD, it still has a great deal to prove.
