Organogenesis (NASDAQ:ORGO) Issues Quarterly Earnings Results

Key Points

• Quarterly results missed expectations: Organogenesis reported a loss of $0.77 per share versus the $0.35 consensus loss, while revenue of $43.76 million fell short of the $54.27 million estimate.
• Revenue outlook was sharply reduced: Q2 revenue declined 58% year over year, driven by a 61% drop in Advanced Wound Care sales amid CMS payment and coverage changes. The company now expects 2026 revenue of $179 million to $215 million.
• Sequential improvement and cost cuts offer some support: Q2 product revenue rose 18% from Q1, while restructurings are expected to reduce annual operating expenses by more than $32 million; management projects positive adjusted EBITDA in Q4.

Organogenesis (NASDAQ:ORGO - Get Free Report) posted its quarterly earnings results on Thursday. The company reported ($0.77) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.35) by ($0.42), FiscalAI reports. The business had revenue of $43.76 million for the quarter, compared to the consensus estimate of $54.27 million. Organogenesis had a positive return on equity of 9.63% and a negative net margin of 0.84%.

Here are the key takeaways from Organogenesis' conference call:

• Q2 revenue fell sharply: Total revenue declined 58% year over year to $42.8 million, including a 61% drop in Advanced Wound Care sales, as CMS payment and coverage changes continued to pressure the skin-substitute market.
• 2026 guidance was reduced: The company now expects full-year revenue of $179 million to $215 million, representing a 62% to 68% year-over-year decline, with recovery anticipated to be more measured and weighted toward the fourth quarter.
• Sequential trends improved: Q2 net product revenue increased 18% from Q1, while Advanced Wound Care sales rose 23% and wound-care unit volume grew 30%, which management attributed to market-share gains and demand for evidence-backed products.
• Cost reductions are being implemented: Two 2026 restructurings, including a June workforce reduction of 138 employees, are expected to lower annual operating expenses by more than $32 million; management projects positive adjusted EBITDA in Q4.
• Pipeline and clinical evidence advanced: The FDA accepted Amnuvx’s biologics application and set an April 24, 2027 PDUFA date, while new studies supporting PuraPly AM and Affinity may strengthen future coverage decisions. The company also entered a potential $75 million at-the-market equity program to support working capital and strategic initiatives.

Organogenesis Stock Up 1.7%

ORGO traded up $0.04 during mid-day trading on Thursday, reaching $2.41. 724,231 shares of the stock were exchanged, compared to its average volume of 735,853. Organogenesis has a 1 year low of $2.04 and a 1 year high of $7.08. The company has a debt-to-equity ratio of 0.05, a quick ratio of 3.16 and a current ratio of 3.53. The stock has a market capitalization of $310.12 million, a PE ratio of -12.68 and a beta of 1.34. The company has a 50 day moving average price of $2.44 and a two-hundred day moving average price of $2.77.

Institutional Trading of Organogenesis

Institutional investors and hedge funds have recently made changes to their positions in the company. Strs Ohio purchased a new position in Organogenesis during the first quarter worth about $105,000. Creative Planning increased its stake in Organogenesis by 84.5% in the 2nd quarter. Creative Planning now owns 35,392 shares of the company's stock valued at $130,000 after buying an additional 16,205 shares during the last quarter. Cetera Investment Advisers purchased a new stake in Organogenesis in the 2nd quarter valued at about $222,000. American Century Companies Inc. lifted its position in shares of Organogenesis by 25.6% during the 2nd quarter. American Century Companies Inc. now owns 164,793 shares of the company's stock worth $603,000 after buying an additional 33,573 shares in the last quarter. Finally, Russell Investments Group Ltd. lifted its position in shares of Organogenesis by 36.6% during the 2nd quarter. Russell Investments Group Ltd. now owns 168,152 shares of the company's stock worth $617,000 after buying an additional 45,021 shares in the last quarter. Hedge funds and other institutional investors own 49.57% of the company's stock.

Analysts Set New Price Targets

A number of research analysts recently issued reports on the stock. UBS Group set a $3.00 target price on shares of Organogenesis in a research report on Thursday, May 28th. Wall Street Zen upgraded shares of Organogenesis from a "strong sell" rating to a "sell" rating in a report on Saturday, June 20th. Weiss Ratings downgraded shares of Organogenesis from a "hold (c)" rating to a "sell (d)" rating in a research note on Monday, May 11th. Truist Financial assumed coverage on shares of Organogenesis in a report on Thursday, May 28th. They set a "hold" rating and a $3.00 price objective on the stock. Finally, BTIG Research cut shares of Organogenesis from a "buy" rating to a "neutral" rating in a research report on Friday, May 8th. One analyst has rated the stock with a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, the company currently has a consensus rating of "Hold" and an average target price of $5.75.

Organogenesis Company Profile

Organogenesis Inc operates as a regenerative medicine company focused on the development, manufacturing and commercialization of therapeutic solutions for wound care, surgical repair and sports medicine. The company's product portfolio addresses a range of acute and chronic tissue repair needs, leveraging bioengineered skin substitutes, human placental-derived products and other allografts designed to promote healing and reduce scarring. Organogenesis markets its therapies to hospitals, outpatient clinics, wound care centers and other healthcare providers.

Key offerings include Apligraf, a living skin substitute for treatment of diabetic foot ulcers and venous leg ulcers; Dermagraft, a cryopreserved human fibroblast-derived dermal substitute; Grafix, a placental membrane allograft for complex and chronic wounds; and TheraSkin, a cryopreserved human skin allograft used in surgical and reconstructive procedures.

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