A month has gone by since the last earnings report for Conmed (CNMD Quick QuoteCNMD - Free Report) . Shares have added about 6.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Conmed due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

CONMED Down on In-Line Q3 Earnings & Lower 2022 View

CONMED delivered adjusted earnings per share (EPS) of 77 cents in third-quarter 2022, beating the Zacks Consensus Estimate of 75 cents by 2.7%. The bottom line declined 3.8% from the year-ago quarter’s levels.

GAAP EPS for the quarter was $1.48 compared with earnings of 47 cents per share in the year-ago quarter.

Revenues in Detail

CONMED’s third-quarter revenues were $275.1 million, up 10.6% year over year. The top line missed the Zacks Consensus Estimate by 2.5%.

At the constant exchange rate (“CER”), revenues increased 12.1%.

Segment Details

Revenues in the Orthopedic Surgery segment totaled $118.6 million, up 12.2% from the year-ago quarter on a reported basis. At CER, revenues increased 14%.

Orthopedics revenues improved 20.4% on a reported basis on the domestic front while gaining 7.6% (up 10.4% at CER) from the prior-year quarter’s levels on the international front.

Revenues in the General Surgery segment amounted to $156.5 million, up 9.4% year over year on a reported basis and 10.7% at CER.

Domestically, General Surgery sales increased 11.8% year over year, while international sales advanced 4% on a reported basis (up 8.5% at CER).

Sales by Geography

In the reported quarter, sales in the United States amounted to $155.7 million, up 14.2% year over year. International sales were $119.4 million, up 6.2% year over year on a reported basis and 17.2% at CER.

Margins

In the quarter under review, CONMED’s gross profit rose 6.5% to $151.6 million. The gross margin declined 210 basis points (bps) to 55.1%.

Selling & administrative expenses increased 9.4% to $114.6 million. Research and development expenses rose 17.8% year over year to $12.8 million.

Operating profit totaled $24.2 million, down 9.2% from the prior-year quarter’s figure. The operating margin declined 190 bps to 8.8%.

2022 Guidance Revised

CONMED tightened its guidance for revenues and lowered the same for adjusted earnings in 2022, reflecting the anticipated negative impact of foreign currency movement.

The company now projects full-year 2022 revenues in the range of $1.1-$1.115 billion (the previous guidance was $1.095-$1.14 billion). The Zacks Consensus Estimate is currently pegged at $1.12 billion.

Adjusted EPS for the full year is now expected in the range of $3.21-$3.28 (down from the previously projected band of $3.25-$3.45). The Zacks Consensus Estimate currently stands at $3.29.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -11.3% due to these changes.

VGM Scores

At this time, Conmed has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Conmed has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.