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Penumbra (PEN) Gains But Lags Market: What You Should Know

Zacks Equity Research

Penumbra (PEN) closed the most recent trading day at $181.06, moving +0.93% from the previous trading session. This change lagged the S&P 500's 2.66% gain on the day. Elsewhere, the Dow gained 2.21%, while the tech-heavy Nasdaq added 3.57%.

Coming into today, shares of the medical device maker had gained 11.2% in the past month. In that same time, the Medical sector gained 15.33%, while the S&P 500 gained 12.74%.

Investors will be hoping for strength from PEN as it approaches its next earnings release, which is expected to be May 7, 2020. In that report, analysts expect PEN to post earnings of $0.10 per share. This would mark a year-over-year decline of 56.52%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $132.55 million, up 3.2% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.52 per share and revenue of $578.41 million, which would represent changes of -46.94% and +5.66%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for PEN. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 56.63% lower. PEN is currently a Zacks Rank #3 (Hold).

Investors should also note PEN's current valuation metrics, including its Forward P/E ratio of 342.8. Its industry sports an average Forward P/E of 33.41, so we one might conclude that PEN is trading at a premium comparatively.

The Medical - Instruments industry is part of the Medical sector. This group has a Zacks Industry Rank of 35, putting it in the top 14% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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