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  5. ABCL: Please comment on earnings and your thoughts on investing in ABCL and MNST. [AbCellera Biologics Inc.]
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Q: Please comment on earnings and your thoughts on investing in ABCL and MNST.

Thanking you in advance for your answers and for all the other great work you do. Cheers John
Asked by John on August 08, 2023
5i Research Answer:

MNST EPS of 39c matched estimates; So did sales of $1.86B. But margins did miss estimates and the stock fell. Monster's 50% EPS jump from 2Q22, meeting consensus expectations, highlights  a combination of price increases, lower costs associated with freight and aluminum cans, and a moderation in production inefficiencies stemming from supply-chain disruptions in the prior year. Operating margin is expected to improve through year-end, assuming economic conditions remain supportive to consumer spending. The company plans to launch a hard iced-tea extension of The Beast Unleashed, named Nasty Beast Hardcore Tea, by early next year. The stock bounced back 6% yesterday, and we think the long term growth story does remain intact here. 

ABCL reported a loss of 11c per share, vs estimates of -12c. Sales of $10.0M missed estimates of $11.4M. EBITDA was negative $45.8M, missing estimates of -$39.8M. No 'milestone' revenue was reported in the quarter and there is limited visibility in the current pipeline. Sales fell 78% sand the loss was 4X last year's level. It did have 5 'program starts' in the quarter which is one positive point. It also has $800M cash, nearly 40% of its market cap. But with revenue falling off a cliff and continued losses, it is hard to generate any excitement here.