Back to top

Analyst Blog

WellPoint Inc. (WLP - Analyst Report) is set to report first-quarter 2014 results on April 30, 2014. Last quarter, it posted a 1.16% surprise. Let’s see how things are shaping up for this announcement.

Factors This Past Quarter

In the first quarter, WellPoint has been upfront in taking up initiatives that would strengthen its capacities as a healthcare service provider. Among these initiatives, the collaborations with Healthways, Inc. (HWAY - Analyst Report) and American Academy of Pediatrics in Feb 2014 are worth a special mention. Moreover, to focus on core operations, WellPoint divested its online contact lens retail subsidiary, 1-800 CONTACTS and glasses.com.

Toward making its services more accessible to its members, WellPoint adopted the Web Content Accessibility Guidelines (WCAG) version 2.0 level AA as its accessibility standard during the quarter. However, increasing medical cost experience raises concern.

Earnings Whispers?

Our proven model does not conclusively show that WellPoint is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zero Zacks ESP:  That is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $2.12 per share, making the difference 0.00%.

Zacks Rank #2 (Buy): WellPoint’s Zacks Rank #2 increases the predictive power of ESP, but when combined with a zero ESP, it makes surprise prediction difficult.

We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing zero or negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:  

MedAssets, Inc. (MDAS - Snapshot Report) with Earnings ESP of +3.45% and Zacks Rank #2.

Humana Inc. (HUM - Analyst Report) with Earnings ESP of +1.55% and Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
CENTURY ALU… CENX 22.53 +4.50%
ERBA DIAGNO… ERB 2.91 +4.30%
PLANAR SYST… PLNR 4.31 +3.86%
MALLINCKROD… MNK 72.17 +3.83%
GTT COMMUNI… GTT 12.06 +3.52%