CYRX set to test 200-sma for support following earnings miss

Cryoport Inc. (CYRX), a global leader in supply chain solutions for cell and gene therapies, posted its Q4 results. The company fell short of top and bottom line expectations which is leading to downward pressure on shares. The stock is coming into critical support at its 200-sma ($15) which looms large as it sees some defenses from analysts following earnings. 

CYRX reported a loss of $1.31 per share for the fourth quarter (Q4) of 2023. Revenues for the quarter decreased by 5.1% year-over-year to $57.26 million, falling short of the $58.39 million consensus estimate. By source, services revenue for Q4 2023 increased by 12% year-over-year to $37.0 million, while product revenue decreased by 26% year-over-year to $20.2 million.

Biopharma/Pharma revenue accounted for $47.9 million in Q4 2023, down 5% or $2.7 million compared to $50.6 million in Q4 2022. Revenue from the support of commercial Cell and Gene therapies increased by $1.5 million or 36% to $5.7 million in Q4 2023. Animal Health revenue was $6.8 million in Q4 2023, down 10% or $0.7 million compared to $7.5 million in Q4 2022, while Reproductive Medicine revenue increased by 11% to $2.6 million in Q4 2023.

Gross margin for Q4 2023 was 40.6%, compared to 43.5% for the same period in 2022. For FY 2023, the gross margin was 42.6%, compared to 43.8% for FY 2022.

Operating costs and expenses increased significantly for Q4 2023, reaching $93.1 million, which includes a non-cash impairment charge to goodwill of $49.6 million related to the MVE Biological Solutions reporting unit. This compares to $37.3 million in operating costs and expenses for Q4 2022. 

Despite the financial shortcomings, the company saw a record high of 675 global clinical trials supported during the quarter. However, CYRX issued downside guidance for the full year (FY) 2024, expecting revenues to range between $242 million and $252 million, which is lower than the consensus estimate of $253.20 million.

In response to the company's guidance, analyst David Saxon of Needham lowered his CYRX target to $18 from $19. Saxon stated that while the revenue missed the consensus and the company provided guidance below the consensus for FY 2024, management believes that the Minimum Viable Earnings (MVE) has stabilized and expects trends to improve throughout the year. CYRX saw strength in commercial revenue, which grew by 36% year-over-year and accounted for nearly 10% of sales in 2023. The company is also supporting approximately 71% of the active clinical trial market. With shares trading at a roughly 2.5x EV/sales in after-hours and expectations for growth to improve during the year, Saxon believes CYRX's risk/reward remains favorable.

In conclusion, while Cryoport Inc. reported lower revenue and a net loss for Q4 2023 and FY 2023 compared to the previous year, the company saw growth in commercial revenue and strength in its services business. With a focus on progressive advancement in its business and stronger overall growth in its services business expected for FY 2024, Cryoport remains committed to improving its financial performance and supporting the growth of the active C> clinical trial market.