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Medical Instrument Stocks' Earnings Preview: ISRG, IVTY, CHEK

Zacks Equity Research

The second-quarter 2016 earnings season has started on an encouraging note, with big banks reporting moderately fair results. However, growth trends are still dreary particularly due to the weaknesses in the energy and technology sector.

As per the latest Zacks Earnings Trend report, overall second-quarter earnings for S&P 500 companies are expected to be down 5.4% from the year-ago quarter on revenues that are estimated to decline 0.5%.

Total earnings for the energy sector are expected to be down 77.1% on lower revenues (down 25.7%). Excluding the Energy sector, earnings for the rest of the index are estimated to be down 2.1%.

The current week (Jul 18-22) will see releases from more than 299 companies, out of which 92 companies are S&P 500 members. Notably, Medical companies will start reporting this week. Medical is one of the seven sectors in the S&P 500 that is expected to report earnings growth in the second quarter.

Here is a sneak peek into three medical instruments companies that are lined up to report earnings on Jul 19.

After market close, Da-Vinci system maker Intuitive Surgical Inc. ISRG is scheduled to report its quarterly numbers. Growing adoption of its robot-assisted surgical system among physicians for general surgery (hernia repair, colorectal) procedures and innovative product pipeline are key catalysts, in our view.

However, our proven model does not conclusively show that the company is likely to beat earnings, given the combination of a Zacks Rank #4 (Sell) and Earnings ESP of 0.00%.
 

INTUITIVE SURG Price and EPS Surprise

INTUITIVE SURG Price and EPS Surprise | INTUITIVE SURG Quote

As per our model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. Simultaneously, 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.

(Read more: Intuitive Surgical Q2 Earnings: What's in Store?)

Invuity Inc IVTY is a medical technology company, which through its Intelligent Photonics technology platform enables the transmission, management and manipulation of light in surgical procedures.
 

INVUITY INC Price and EPS Surprise

INVUITY INC Price and EPS Surprise | INVUITY INC Quote

Our proven model does not conclusively show that the company is likely to beat earnings, given the combination of Zacks Rank #4 and Earnings ESP of 0.00%.

We also note that Invuity's results compared unfavorably with the Zacks Consensus Estimate in the last four quarters, with an average miss of 91.15%.
 

CHECK CAP LTD Price and EPS Surprise

CHECK CAP LTD Price and EPS Surprise | CHECK CAP LTD Quote

Check-Cap Ltd. CHEK is a medical diagnostics company, which develops ingestible imaging capsule that utilizes low-dose X-rays for Colorectal cancer screening.
 
Our proven model does not conclusively show that the company is likely to beat earnings, given the combination of Zacks Rank #2 and Earnings ESP of 0.00%.

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INTUITIVE SURG (ISRG): Free Stock Analysis Report
 
CHECK CAP LTD (CHEK): Free Stock Analysis Report
 
INVUITY INC (IVTY): Free Stock Analysis Report
 
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