Will NPS Pharma (NPSP) Miss This Earnings Season?

Zacks Equity Research

NPS Pharmaceuticals, Inc. (NPSP) is scheduled to report its fourth-quarter 2013 results after the closing bell on Feb 18. Last quarter, NPS Pharma had delivered an earnings surprise of +50.00%. Let’s see how things are shaping up for this announcement.

Factors at Play

NPS Pharma has delivered positive earnings surprises in three of the last four quarters  with an average beat of 9.88%.

Although sales of Gattex, the only approved product at NPS Pharma (launched in Feb 2013 in the U.S.), will boost revenues, higher operating costs will partially offset the positive impact of Gattex sales. NPS Pharma is actively investing in its pipeline as well as making efforts to market Gattex effectively. Increased costs will hurt the bottom line.

Earnings Whispers?

Our proven model does not conclusively show that NPS Pharma is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP for NPS Pharma is 0.00% since the Most Accurate Estimate is 2 cents, in line with the Zacks Consensus Estimate.

Zacks Rank: NPS Pharma’s Zacks Rank #3 (Hold) has little effect on the predictive power of ESP because the Zacks Rank #3 when combined with a 0.00% ESP makes surprise prediction difficult.

Other Stocks to Consider

Here are some companies you may want to consider as our model shows that they have the right combination of elements, i.e., a positive Zacks Earnings ESP and a Zacks Rank #1, 2 or 3.

Actavis (ACT) has an Earnings ESP of +0.33% and holds a Zacks Rank #2 (Buy). Actavis will be reporting fourth quarter earnings on Feb 20.

NuVasive, Inc. (NUVA) has an Earnings ESP of +11.11% and holds a Zacks Rank #1 (Strong Buy). NuVasive will be reporting fourth-quarter earnings on Mar 3.

Medivation, Inc. (MDVN) has an Earnings ESP of +36.36% and holds a Zacks Rank #2 (Buy). NuVasive will be reporting fourth-quarter earnings on Feb 27.

Read the Full Research Report on MDVN
Read the Full Research Report on NUVA
Read the Full Research Report on ACT
Read the Full Research Report on NPSP


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