雅虎香港財經 Can the 4 Medical Device Stocks Hit Targets This Earnings Season?
The earnings season for the Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry classification) is in full swing now with several MedTech players already releasing their quarterly results. The quarterly performances have been encouraging so far despite companies still navigating ongoing macroeconomic headwinds, primarily in the form of worldwide geopolitical issues and healthcare labor shortages.
The latest Earnings Preview indicates that 16.7% of the companies in the Medical sector, constituting nearly 32.6% of the sector’s market capitalization, reported earnings until Apr 24. Of these, 70% beat earnings and revenue estimates. Earnings improved 0.7% year over year on the back of 3.6% higher revenues.
Overall, first-quarter earnings of the Medical sector are expected to decline 7.6% despite a 6.3% sales increase. This compares with fourth-quarter earnings decline of 17.1% despite 7% reported revenue growth. Per the latest trends, the Medical sector is one of the seven sectors whose earnings are expected to be below the year-earlier level in the reporting cycle. It is also one of the seven sectors that are predicted to earn less in the first quarter of 2024 compared with the year-ago period.
Medical Device Quarterly Synopsis
Integral to the broader Medical sector, the Medical Device or Zacks-defined Medical Products companies’ collective business growth is likely to have stabilized despite the ongoing macroeconomic headwinds in the United States and outside. With the pandemic-related crisis gone, the industry is experiencing rapid adoption of generative Artificial Intelligence (genAI) and digital therapies. Rising innovation and investment in this space are being driven by an aging population, growing healthcare awareness and increasing access to better health options. Market experts believe these trends will be a major driving force behind the current earnings season.
However, the industry is facing challenges due to the worsening geopolitical environment. This situation is exacerbated by worldwide supply-chain bottlenecks that result in high costs for labor and raw materials, as well as freight and a shortage of healthcare workers. Additionally, diagnostic testing companies have been witnessing a year-over-year decline in testing demand compared with that in the year-ago period for COVID-19 testing products.
Overall, the January-March months were marked by strength in product portfolios and solid customer adoption of products. Medical Device companies like Cencora, Inc. COR, Glaukos Corporation GKOS, Surmodics, Inc. SRDX and Accuray Incorporated ARAY are likely to have been positively impacted by these tailwinds, despite encountering turbulence on the macroeconomic front.
Let’s observe the status of four MedTech players who are scheduled to announce results on May 1.
Cencora: Cencora’s second-quarter fiscal 2024 results might have been favored by sustained strong growth in specialty product sales, coupled with broad-based solid performance and utilization trends across the portfolio in the U.S. Healthcare Solutions segment. High demand for the recently-approved GLP-1 drugs for diabetes and weight loss is likely to have boosted growth. Moreover, the new distribution center in California should continue to support its scale of supply. (Read more: Cencora to Report Q2 Earnings: What's in the Cards?)
The Zacks Consensus Estimate for fiscal second-quarter earnings per share is pegged at $3.65. Revenues are expected to be $70.35 billion.
Cencora, Inc. Price and EPS Surprise
Cencora, Inc. price-eps-surprise | Cencora, Inc. Quote
Cencora does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — which increases the odds of an earnings beat. COR has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Glaukos: Glaukos’ first-quarter 2024 revenues are likely to have been driven by the continued adoption of its products launched in the past few quarters, including iPrime, iAccess and iStent. The company has been focused on delivering improved outcomes for patients suffering from chronic eye diseases. One of the advanced pipeline candidates, iDose TR, has been successfully tested in a phase III study. Glaukos filed a new drug application with the FDA in February, and a decision regarding the same is expected later this year. These raise our optimism about the stock.
The Zacks Consensus Estimate for first-quarter 2024 loss per share is pegged at 59 cents. Revenues are expected to be $78.7 million.
Glaukos Corporation Price and EPS Surprise
Glaukos Corporation price-eps-surprise | Glaukos Corporation Quote
GKOS has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Surmodics: Surmodics’ second-quarter fiscal 2024 revenues are likely to have been aided by continued strength in both segments and its primary sources. Per management, the Medical Device segment’s revenues benefited from record product sales, which increased year over year fueled by sales of the company’s vascular interventions portfolio, including strong contributions from both the SurVeil drug-coated balloon and Pounce thrombectomy products. SRDX is likely to have witnessed robust adoption of its Preside medical device coating technology, which was launched in October 2023.
The Zacks Consensus Estimate for fiscal second-quarter loss per share is pegged at 36 cents. Revenues are expected to be $28.8 million.
Surmodics, Inc. Price and EPS Surprise
Surmodics, Inc. price-eps-surprise | Surmodics, Inc. Quote
SRDX has an Earnings ESP of 0.00% and a Zacks Rank #3.
Accuray: Accuray’s third-quarter fiscal 2024 results are likely to have been driven by an uptick in order growth and product adoption across geographies. On the fiscal second-quarter earnings call in January, management confirmed that new product launches like VitalHold for Radixact, Tomo C in China, Helix, Accuray’s Helical value segment product and Cenos, online adaptive capability will be growth catalysts. This raises our optimism about the stock.
The Zacks Consensus Estimate for fiscal third-quarter loss per share is pegged at a penny. Revenues are expected to be $114.6 million.
Accuray Incorporated Price and EPS Surprise
Accuray Incorporated price-eps-surprise | Accuray Incorporated Quote
ARAY has an Earnings ESP of 0.00% and a Zacks Rank #3.
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