What Happened?
Shares of radiopharmaceutical company Lantheus Holdings (NASDAQ:LNTH) fell 4.7% in the afternoon session after Truist Securities downgraded the stock from a "Buy" to a "Hold" rating and slashed its price target by over 43%. The downgrade, which cut the price target to $63 from $111, was driven by concerns over the performance of Lantheus's key radiopharmaceutical product, PYLARIFY. This follows the company's disappointing second-quarter results, where it missed both revenue and earnings estimates. Revenue fell 4.1% year-over-year to $378 million due to competitive pricing pressures. Compounding the issue, Lantheus also lowered its full-year financial guidance for revenue and earnings, signaling expectations for continued headwinds. The combination of missed Q2 targets, a reduced outlook, and the subsequent analyst downgrade has soured investor sentiment.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Lantheus? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Lantheus’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 29.8% on the news that the company reported disappointing second-quarter financial results and slashed its full-year forecast. The radiopharmaceutical company announced quarterly revenue of $378 million and adjusted earnings per share of $1.57, both of which missed analysts' expectations. A key factor in the performance was an 8.3% decrease in sales for its main product, PYLARIFY, which faced increased competition. Compounding the issue, Lantheus lowered its full-year guidance significantly. The company projected full-year revenue between $1.47 billion and $1.51 billion, well below the consensus estimate of $1.57 billion. Similarly, its earnings per share forecast of $5.50 to $5.70 fell far short of the anticipated $6.64.
Lantheus is down 39.4% since the beginning of the year, and at $53.82 per share, it is trading 53.9% below its 52-week high of $116.69 from October 2024. Investors who bought $1,000 worth of Lantheus’s shares 5 years ago would now be looking at an investment worth $3,977.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.