AbbVie (ABBV) has experienced a number of setbacks over the last year, and its stock has underperformed for much of 2018 as a result. Part of that underperformance was the byproduct of increasingly heightened expectations due to the stock’s strong returns throughout 2017 and the start of 2018, but concerns over the company’s outlook and the viability of Humira as a long-term source of revenues have also played a significant role in the stock’s weakness.
March 22nd marked the beginning of the end for the bull trend in AbbVie’s stock, as the company announced that it was abandoning plans to seek accelerated FDA approval for its oncology drug Rova-T.
The Rova-T setback was just the beginning of many that AbbVie would experience throughout 2018, with a variety of problems that ranged from a botched stock sale to allegations of illegal kickbacks. All in all, it has been far from an ideal year for ABBV shareholders; however, a deeper look would indicate that the underlying company is performing better than the stock is letting on.
Despite ABBV’s decline in both price and valuation since its peak in late January, growth for the company itself has remained strong. On an earnings basis, AbbVie has reported non-GAAP earnings for the last year of $7.49, reflecting roughly 41% growth over earnings of $5.31 for the year prior.
GAAP earnings growth for the same period hasn’t been as strong, with TTM earnings of $4.84 versus $4.11 for the year prior indicating growth of 17.8%; however, it should be noted that GAAP earnings for Q4 of 2017 had taken a one-time hit of $0.77 pertaining to the enactment of the Tax Cuts and Jobs Act, so for this situation the non-GAAP results are a more accurate indicator of the company’s performance.
Revenue growth has been similarly strong, with TTM revenues of $32.187B that increased by 18% over revenues of $27.273B for the year prior.
Looking forward, management expects the company’s performance to remain strong, as illustrated by yet another raise of adjusted EPS guidance for the full-year 2018. In its most recent quarter, AbbVie updated its full-year guidance range from $7.76 to $7.86 to $7.90 to $7.92. At the midpoint, the raise represents an improvement of 2.59% over the prior range, as well as Y/Y growth of 41%.