OpGen, Inc. :OPGN-US: Earnings Analysis: Q2, 2016 By the Numbers : August 11, 2016

OpGen, Inc. reports financial results for the quarter ended June 30, 2016.

We analyze the earnings along side the following peers of OpGen, Inc. – Radius Health Inc (RDUS-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 1.18 million, Net Earnings of USD -5.05 million.
  • Gross margins narrowed from 72.54% to 57.88% compared to the same period last year, operating (EBITDA) margins now -423.95% from -787.02%.
  • Earnings growth from operating margin improvements as well as one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2015-06-30 2015-09-30 2015-12-31 2016-03-31 2016-06-30
Relevant Numbers (Quarterly)
Revenues (mil) 0.38 0.98 1.33 1.08 1.18
Revenue Growth (%YOY) N/A N/A N/A 128 215.3
Earnings (mil) -5.36 -4.67 -4.73 -4.51 -5.05
Earnings Growth (%YOY) N/A N/A N/A -73.64 5.7
Net Margin (%) -1428.4 -476.21 -355.58 -418.54 -427.19
EPS -0.84 -0.38 -0.38 -0.36 -0.37
Return on Equity (%) -914.61 -179.87 -194.6 -335.48 -384.71
Return on Assets (%) -296.77 -129.76 -122.96 -153.78 -171.79

Access our Ratings and Scores for OpGen, Inc.

Market Share Versus Profits

Revenues History
Earnings History

OPGN-US‘s change in revenue this period compared to the same period last year of 215.30% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that OPGN-US is holding onto its market share. Also, for comparison purposes, revenues changed by 9.86% and earnings by -12.13% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Earnings Growth Analysis

The company’s gross margins showed no year-on-year improvement. In spite of this, the company’s earnings rose, influenced primarily by the improvement in operating margins (EBITDA margins) from -787.02% to -423.95%. For comparison, gross margins were 38.54% and EBITDA margins were -400.09% in the last period.

Gross Margin Versus EBITDA Margin

Gross Margin Trend

Companies sometimes sacrifice improvements in revenues and margins in order to extend friendlier terms to customers and vendors. Capital Cube probes for such activity by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without a worsening of working capital, it is possible that the company’s performance is a result of truly delivering in the marketplace and not simply an accounting prop-up using the balance sheet.

Gross Margin History
Working Capital Days History

OPGN-US‘s decline in gross margins were offset by some improvements on the balance sheet. The management of working capital, for example, shows progress. The company’s working capital days have fallen to 286.28 days from 388.38 days for the same period last year. This leads Capital Cube to conclude that the gross margin decline is not altogether bad.

Gross Margin Versus Working Capital Days

Margins

The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from -813.97% to -423.95% and (2) one-time items. The company’s pretax margins are now -427.19% compared to -1,428.40% for the same period last year.

EBIT Margin Versus PreTax Margin
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for OpGen, Inc.

Company Profile

OpGen, Inc. is a precision medicine company, which engages in developing molecular information solutions to combat infectious disease in global healthcare settings, helping to guide clinicians with more rapid information about life threatening infections, improve patient outcomes, and decrease the spread of infections caused by multidrug-resistant microorganisms. The company was founded on January 22, 2001 and is headquartered in Gaithersburg, MD.

CapitalCube does not own any shares in the stocks mentioned and focuses solely on providing unique fundamental research and analysis on approximately 50,000 stocks and ETFs globally. Try any of our analysis, screener or portfolio premium services free for 7 days. To get a quick preview of our services, check out our free quick summary analysis of OPGN-US.