Medical Product Nov 1 Earnings Lineup: CERN, IDXX, DXCM, BIO
With Q3 earnings reports already out from more than 58.2% of the S&P 500 members (291 companies), our latest Earnings Preview has exhibited an improving trend so far. Approaching the second half of the earnings reporting cycle, we are further assured about this quarter turning out to be the first to witness earnings growth after five back-to-back quarters of earnings declines for the S&P 500 index.
Total earnings for these 291 companies are up 2.2% year over year on 1.3% higher revenues, with 73.5% beating EPS estimates and 57.4% coming ahead of revenue estimates. As per the report, Medical is one of the 12 broader sectors among the 16 Zacks sectors which are expected to report earnings growth. The sector is likely to deliver 6% earnings growth on the back of 7.3% higher revenues in the third quarter.
What’s in Store for the Med-Product Space?
Medical product, a niche area under the medical device subcategory within the broader Medical sector, holds a lot of promise at the moment thanks to the temporary two-year suspension of the controversial 2.3% medical device excise tax which took a toll on the entire MedTech industry since its enactment in 2013. In addition, the recent change in consumer demand and market dynamics led to a dramatic transformation in the entire healthcare system. This is evident from the growing prevalence of minimally invasive surgeries, rising demand for liquid biopsy tests, use of IT for ensuring quick and improved patient care, and the shift of the payment system to a value-based model among others.
Let’s take a look at the major Medical Product stocks slated to release their quarterly reports on Nov 1:
Cerner Corporation CERN
This health information technologies company is scheduled to report its third-quarter 2016 earnings on Nov 1. We believe that Cerner’s strong product portfolio will help boost its customer base. The frequent contract wins reflect growing traction. Moreover, the company has strong growth opportunities in the revenue cycle management (RCM) and ambulatory market.
However, our proven model does not conclusively show that Cerner is likely to beat earnings this quarter as along with a Zacks Rank #3 (Hold), it has an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 56 cents. We note that while a favorable Zacks Rank #3 increases the predictive power of the ESP, a 0.00% ESP makes surprise prediction difficult. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.(Read More: Can Cerner Spring a Surprise this Earnings Season?)
CERNER CORP Price and EPS Surprise
CERNER CORP Price and EPS Surprise | CERNER CORP Quote
IDEXX Laboratories, Inc. IDXX
Headquartered in Delaware NJ, IDEXX Laboratories is a developer, manufacturer and distributer of products and services primarily for the companion animal veterinary, livestock and poultry, water testing and dairy markets. We note that IDXX’s continued strong instrument placements, global lab momentum reflecting leverage of expanded commercial capability as well as strong test menu expansion remained the key highlights for the company's business in the first half of 2016. However, high dependence on third-party distributors and intense competition continue to pose threats.
The company is scheduled to report third-quarter 2016 numbers on Nov 1. IDEXX currently has an Earnings ESP of 0.00% along with a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Note that stocks with a Zacks Rank #1, 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates. Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
IDEXX LABS INC Price and EPS Surprise
IDEXX LABS INC Price and EPS Surprise | IDEXX LABS INC Quote
DexCom, Inc. DXCM
This medical device company is focused on the design, development and commercialization of continuous glucose monitoring systems (CGM). The large and growing diabetes market, strong product portfolio, innovative product pipeline, collaborative agreements with several companies and focus on international markets are key positives. On the other hand, intensifying competition, entry of new products, reluctance on the part of physicians and patients to adopt DexCom’s products, reimbursement risks, supply constraints and working capital problems are key concerns.
DexCom, which is scheduled to report third-quarter 2016 numbers on Nov 1, currently has a Zacks Rank #3 and an Earnings ESP of -35.71%. That is because the Most Accurate estimate stands at a loss of 19 cents while the Zacks Consensus Estimate is pegged at a loss of 14 cents. Hence, we cannot conclusively predict that DexCom is likely to beat estimates this quarter.
DEXCOM INC Price and EPS Surprise
DEXCOM INC Price and EPS Surprise | DEXCOM INC Quote
Bio-Rad Laboratories, Inc. BIO
This medical product company is a provider of a broad range of innovative products and solutions for the life science research and clinical diagnostic markets.The company is scheduled to report third-quarter 2016 numbers on Nov 1.
Bio-Rad is expected to release its third-quarter fiscal 2016 financial numbers on Nov 1. The company carries a Zacks Rank #5 (Strong Sell) and an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 51 cents.
BIO-RAD LABS -A Price and EPS Surprise
BIO-RAD LABS -A Price and EPS Surprise | BIO-RAD LABS -A Quote
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CERNER CORP (CERN): Free Stock Analysis Report
IDEXX LABS INC (IDXX): Free Stock Analysis Report
DEXCOM INC (DXCM): Free Stock Analysis Report
BIO-RAD LABS -A (BIO): Free Stock Analysis Report
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