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Anthem (ANTM) Gears Up for Q4 Earnings: What's in Store?

Zacks Equity Research

Anthem Inc. ANTM will release fourth-quarter 2019 results on Jan 29, before market open.

In the last reported quarter, the company delivered earnings of $4.87 per share, marginally beating the Zacks Consensus Estimate by 0.6%. Additionally, the bottom line improved 27.8% year over year on the back of higher revenues.

Let’s see how things are shaping up prior to the announcement.

The company’s performance is likely to have been driven by increased revenues. The Zacks Consensus Estimate for fourth-quarter revenues stands at $26.8 billion, implying a 15.2% increase from the prior-year reported number.

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at $3.90, suggesting a 59.8% surge from the year-ago reported figure. This impressive upside is likely to have been aided by the company’s solid revenue base.

The consensus mark for Government business revenues indicates an 11.8% improvement from the year-earlier reported figure. The company’s Commercial & Specialty Business segment might have also contributed to its top line. The consensus estimate for the same hints at a 1.9% increase from the prior-year reported number.

Moreover, Medicaid members are expected to have risen on account of contract wins. The company's Medicare Advantage members are also likely to have increased in strength, riding on attractive plan designs and value-based care.

Additionally, total medical membership for the quarter to be reported is likely to have bumped The Zacks Consensus Estimate for medical enrollment implies 2.6% growth from the year-ago reported figure.

Also, Anthem is likely to have benefited from a steady cash flow in the fourth quarter of 2019.

However, the company might have incurred heavy selling, general and administrative expenses due to growth-related investments.

What the Quantitative Model States

Our proven model does not conclusively predict an earnings beat for Anthem this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Anthem has an Earnings ESP of -1.15%. This is because the Most Accurate Estimate is pegged at $3.86, lower than the Zacks Consensus Estimate of $3.90.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Anthem, Inc. Price and EPS Surprise

Anthem, Inc. Price and EPS Surprise

Anthem, Inc. price-eps-surprise | Anthem, Inc. Quote

Zacks Rank: Anthem carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult for the stock this time around.

Stocks to Consider

Some stocks worth considering from the medical sector with the perfect mix of elements to surpass estimates in the next releases are as follows:

AmerisourceBergen Corporation ABC has an Earnings ESP of +0.82% and a Zacks Rank of 3. The company is set to report fourth-quarter earnings numbers on Jan 30.

Molina Healthcare, Inc MOH has an Earnings ESP of +0.48%. This Zacks #3 Ranked company is set to report fourth-quarter earnings performance on Feb 10.

Teladoc Health, Inc. TDOC is slated to release fourth-quarter financial figures on Feb 26. The stock has an Earnings ESP of +11.17% and is #3 Ranked.

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Anthem, Inc. (ANTM) : Free Stock Analysis Report
 
Molina Healthcare, Inc (MOH) : Free Stock Analysis Report
 
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