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Penumbra (PEN) to Report Q1 Earnings: What's in the Cards?

·4 min read

Penumbra, Inc. PEN is slated to report first-quarter fiscal 2021 results on May 4, after the closing bell.

In the last-reported quarter, the company’s earnings per share (EPS) of 42 cents surpassed the Zacks Consensus Estimate by 625%. Moreover, earnings surpassed the consensus estimate in three of the last four quarters and missed in one. The trailing four-quarter average surprise is 177.16%.

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

Factors at Play

Vascular

Similar to last quarter, strong demand for Lightning products is again expected to have driven the vascular segment’s top line in the first quarter. During the fourth-quarter earnings call, Penumbra confirmed the receipt of an indication from the FDA for Lightning 12 used for the treatment of pulmonary embolism or PE. Following the commercial launch, this product is expected to report full-quarter contribution on solid customer adoption. Moreover, in March, Penumbra launched Lighting 7 in the United States. This development is expected to have contributed to the top line in the first quarter.

Over the past few quarter, Penumbra continued to witness strong growth in its international business driven by growth in vascular thrombectomy and embolization products. In the last reported quarter, the company reported sequential growth in Lightning 12. With the business scenario remaining unchanged, we expect these to have continued in the to-be reported quarter as well, adding to the top line.

Penumbra, Inc. Price and EPS Surprise

Penumbra, Inc. Price and EPS Surprise
Penumbra, Inc. Price and EPS Surprise

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

Moreover, Penumbra’s collaboration with Genesis MedTech Group in China is expected to have allowed Penumbra to gain a larger market share in China. We expect the collaboration to have positively contributed to first-quarter growth. During the fourth-quarter earnings call, Penumbra noted expectation of robust growth in Japan in 2021 and beyond, backed by growth opportunities in vascular thrombectomy and virtual reality. We expect the part of this projection to get reflected in first-quarter earnings results.

Neuro

Within the Neuro arm, Penumbra’s launch of BMX96 in late 2020 has been well received by physicians. We expect the continued adoption of BMX96 in the first quarter as well, adding to overall growth in the Neuro business. Similar to the previously-reported quarters, sequential growth is expected within Penumbra’s system for ischemic stroke management product/related support product, neuro embolization and access in the first quarter as well. Similar to the prior quarter, we expect continued sequential growth in Penumbra’s international Neuro business driven by strong performance across Europe, China and Asia-Pacific regions. However, the impact of the voluntary recall of JET seven XTRA FLEX might impede overall Neuro business growth.

Estimate Picture

For first-quarter fiscal 2021, the Zacks Consensus Estimate for total revenues of $153.3 million implies growth of 11.6% from the prior-year reported figure.

The consensus estimate for earnings per share is pegged at 11 cents compared with year-ago break-even earnings.

What Our Model Suggests

Our proven model does not conclusively predict an earnings beat for Penumbra this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Penumbra has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks Worth a Look

Here are a few medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle.

HCA Healthcare, Inc. HCA has an Earnings ESP of +2.14% and a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Cooper Companies, Inc. COO has an Earnings ESP of +7.06% and a Zacks Rank of 2, at present.

Owens & Minor, Inc. OMI has an Earnings ESP of +2.41% and a Zacks Rank of 2, at present.

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