Back to top

Image: Bigstock

Medical Instrument Aug 3 Earnings Lineup: TEAR, GI & More

Read MoreHide Full Article

Medical is one of the seven sectors in the S&P 500 cohort that is expected to witness earnings growth in the second quarter. The sector is likely to record earnings growth of 3.4% on revenue improvement of 7.7%.  

So far, we have seen releases from 317 S&P companies with 72.9% of them beating EPS estimates and 53.6% surpassing revenues.

As per the latest Zacks Earnings Trend, overall second-quarter earnings for S&P 500 companies are expected to be down 3.4% year over year on 0.4% revenue decline.

Medical Instrument, being an important component of the Medical sector, is expected follow the same earnings growth trajectory this earnings season.

Here, we take a look at five Medical instrument stocks set to report their second-quarter 2016 numbers on Aug 3:

TearLab Corporation (TEAR - Free Report) , an in-vitro diagnostic company in the United States, develops lab-on-a-chip technologies that enable eye care practitioners to improve standard of care. Its TearLab Osmolarity System, a proprietary in-vitro diagnostic tear testing platform, measures tear film osmolarity for the diagnosis of dry eye disease.

TEARLAB CORP Price and EPS Surprise

TEARLAB CORP Price and EPS Surprise | TEARLAB CORP Quote

We expect the company to beat estimates as it has the favorable combination of a Zacks Rank #3 (Hold) and an Earnings ESP of +11.11%. Notably, the Zacks Consensus Estimate is currently pegged at a loss of 9 cents while the Most accurate estimate stands at a loss of 8 cents.

As per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 to beat estimates. Simultaneously, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

We are encouraged by the company’s strong revenue growth projection for 2016. Also, since the beginning of the second quarter, the company has been rigorously aiming at the strategic restructuring and divestment of its OcuHub subsidiary, which is also expected to yield favourable results.

We note that TearLab’s results compared favorably with the Zacks Consensus Estimate in the last four quarters, with an average beat of 4.22%.

EndoChoice Holdings, Inc is a medical device company that designs and commercializes various products for gastrointestinal caregivers in the United States and internationally.

The company is expected to gain from its pathology business, international adoption of the Fuse System and the promising single-use product business, which is benefiting from product launches.

ENDOCHOICE HLDG Price and EPS Surprise

ENDOCHOICE HLDG Price and EPS Surprise | ENDOCHOICE HLDG Quote

Especially, the launch of Lumos Adaptive Matrix (technology which provides imaging capability to support the differentiation of tissue in the oesophagus, stomach and colon) in international markets is a noteworthy development in our view.

Nevertheless, our proven model does not conclusively show that the company is likely to beat estimates in spite of its Zacks Rank #2. This is because the company has an Earnings ESP of 0.00% as both the Zacks Consensus Estimate and the Most Accurate estimate stand at a loss of 52 cents.

We also note that EndoChoice Holdings’ results compared favorably with the Zacks Consensus Estimate in the last four quarters, with an average beat of 8.01%.

Entellus Medical Inc is a medical technology company that focuses on the design, development and commercialization of products for the minimally invasive treatment of patients suffering from chronic and recurrent sinusitis.

ENTELLUS MED Price and EPS Surprise

ENTELLUS MED Price and EPS Surprise | ENTELLUS MED Quote

We believe that the FDA clearance of the XprESS Multi-Sinus Dilation System for pediatric patients and international expansion of the market for balloon-based sinus surgery are key positives.
Our proven model does not conclusively show that the company is likely to beat estimates though it carries a Zacks Rank #3. This is largely because the company has an Earnings ESP of 0.00% as both the Zacks Consensus Estimate and the Most Accurate estimate stand at a loss of 35 cents.

Notably, Entellus Medical’s results compared favorably with the Zacks Consensus Estimate in the last four quarters, with an average beat of 2.62%.

Masimo Corporation (MASI - Free Report) is a medical technology company that develops, manufactures and markets non-invasive monitoring technologies worldwide. Increasing adoption of non-invasive patient monitoring technology will help the company gain market traction in our view. In fact, the company’s SET pulse oximetry business holds considerable growth opportunities in the international markets.

We also believe Masimo’s innovative product portfolio is a key catalyst. The company launched Pronto Pulse CO-Oximeter, its next-generation SpHb Spot Check technology, for markets outside the U.S.

The company also unveiled its next-generation SedLine Brain Function monitoring technology at the European Society of Anaesthesiology’s (ESA) 2016 Euroanaesthesia Congress in London, which is a noteworthy development.

MASIMO CORP Price and EPS Surprise

MASIMO CORP Price and EPS Surprise | MASIMO CORP Quote

However, our proven model does not predict an earnings beat for the company in spite of the fact that it sports a Zacks Rank #1. This is because both the Zacks Consensus Estimate and the Most Accurate estimate are pegged at 41 cents, resulting in an Earnings ESP of 0.00% for the company.

Veracyte Inc (VCYT - Free Report) operates as a molecular diagnostics company. It develops and delivers molecular cytology with genomic solutions that resolve diagnostic ambiguity and enable physicians to make informed treatment decisions at an early stage in patient care.

The company is expected to benefit from its pulmonology business based on growth of ‘Afirma Thyroid FNA Analysis’, Medicare coverage for ‘Percepta Bronchial Genomic Classifier’ which provides enhanced lung cancer diagnosis and the launch of ‘IPF’ (Idiopathic Pulmonary Fibrosis) test.

VERACYTE INC Price and EPS Surprise

VERACYTE INC Price and EPS Surprise | VERACYTE INC Quote

Recently, Veracyte announced findings from a new study that demonstrates the potential for the company's in-development Envisia classifier to distinguish IPF from other Interstitial Lung Diseases (ILD) without the need for invasive and potentially risky surgery, which is a significant development for the company.

Nevertheless, our proven model does not conclusively show that the company is likely to beat estimates, given the combination of a Zacks Rank #3 and Earnings ESP of -9.38%. Notably, the Zacks Consensus Estimate for the company is currently pegged at a loss of 32 cents while the Most Accurate estimate stands at a loss of 35 cents.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Masimo Corporation (MASI) - free report >>

Veracyte, Inc. (VCYT) - free report >>

TearLab Corporation (TEAR) - free report >>

Published in