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Stryker (SYK): Can It Post a Beat this Earnings Season?
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Stryker Corporation (SYK - Free Report) , a leading player in the medical technology space, is set to report fourth-quarter and full-year 2016 results on Jan 24 after the bell.
Last quarter, the company posted earnings of $1.39 per share, which surpassed the Zacks Consensus Estimate by 3 cents. Notably, on an average, Stryker beat the Zacks Consensus Estimate by almost 1.91% over the last four quarters.
Stock Performance
A glimpse at the price performance of the stock over the past three months reveals a solid return of almost 7.2%. This compares favorably with the Zacks classified Medical products sub-industry’s decline of around 3.3%.
In fact, with a long-term expected earnings growth rate of 9.52%, the stock has solid potential for further appreciation.
Delving deeper into the fundamentals of the stock, we expect Stryker to beat earnings estimates this quarter.
Why a Likely Positive Surprise?
Our proven model shows that Stryker is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Stryker’s Earnings ESP stands at +0.57%. This is because the company’s Most Accurate estimate is $1.77 while the Zacks Consensus Estimate is pegged at $1.76. A favorable ESP serves as a meaningful and leading indicator of a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Stryker currently has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of Stryker’s Zacks Rank #3 and +0.57% ESP makes us reasonably confident of a beat.
Factors at Play
We believe that the growing adoption of MAKO robots will drive sales in the orthopedic and reconstructive surgery market. Additionally, Stryker is well poised with the acquisitions of both Sage and Physio-Control in the recent past.
The recent tie up with Indo UK Institute of Health’s Medicity Program is an important development as well. Notably, this is a 20-year partnership that aims to offer primary joint replacements (orthopedic areas of hip, knee and trauma products) and healthcare services in India at low costs (read more: Stryker-IUIH Medicity Program to Deliver Services in India).
Meanwhile, Stryker recently presented preliminary results for the fourth quarter and full-year 2016, per which net sales are expected to be in line with the Zacks Consensus Estimate.
Net sales for the current quarter are expected to be around $3.2 billion, up 16.3% on a year-over-year basis.
For the full year, net sales of $11.3 billion increased 13.9% on a year-over-year basis. Management expects net earnings per diluted share to be at the upper end of the previously stated band of $5.75 to $5.80. Notably, this indicates a rise of 12.3% to 13.3% on a year-over-year basis.
Furthermore, the Sage and Physio-Control buyouts are expected to generate a solid yield of $258 million and $740 million in the fourth quarter and full year, respectively.
Notably, Sage will help Stryker expand in markets like Canada, Europe, Japan and Australia. In fact, per management, the ‘positive chemistry’ between Stryker and Sage will pave way for solid revenue growth in the coming quarters as well.
Stocks to Consider
Here are a few stocks worth considering that, as per our model, have the right combination of elements to post an earnings beat this quarter:
athenahealth Inc. , with an earnings ESP of +7.41% and a Zacks Rank #3. Additionally, the stock represents a positive surprise of almost 66.7% in the last quarter.
Amsurg Corp. , with an earnings ESP of +2.50% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here. Notably, the company posted a positive earnings surprise of 1.9% in the preceding quarter.
DaVita HealthCare Partners (DVA - Free Report) has an earnings ESP of +5.50% and a Zacks Rank #3. We note that the company posted a positive earnings surprise of 10.6% in the last quarter.
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Stryker (SYK): Can It Post a Beat this Earnings Season?
Stryker Corporation (SYK - Free Report) , a leading player in the medical technology space, is set to report fourth-quarter and full-year 2016 results on Jan 24 after the bell.
Last quarter, the company posted earnings of $1.39 per share, which surpassed the Zacks Consensus Estimate by 3 cents. Notably, on an average, Stryker beat the Zacks Consensus Estimate by almost 1.91% over the last four quarters.
Stock Performance
A glimpse at the price performance of the stock over the past three months reveals a solid return of almost 7.2%. This compares favorably with the Zacks classified Medical products sub-industry’s decline of around 3.3%.
In fact, with a long-term expected earnings growth rate of 9.52%, the stock has solid potential for further appreciation.
Delving deeper into the fundamentals of the stock, we expect Stryker to beat earnings estimates this quarter.
Why a Likely Positive Surprise?
Our proven model shows that Stryker is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Stryker’s Earnings ESP stands at +0.57%. This is because the company’s Most Accurate estimate is $1.77 while the Zacks Consensus Estimate is pegged at $1.76. A favorable ESP serves as a meaningful and leading indicator of a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Stryker currently has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
Stryker Corporation Price and EPS Surprise
Stryker Corporation Price and EPS Surprise | Stryker Corporation Quote
The combination of Stryker’s Zacks Rank #3 and +0.57% ESP makes us reasonably confident of a beat.
Factors at Play
We believe that the growing adoption of MAKO robots will drive sales in the orthopedic and reconstructive surgery market. Additionally, Stryker is well poised with the acquisitions of both Sage and Physio-Control in the recent past.
The recent tie up with Indo UK Institute of Health’s Medicity Program is an important development as well. Notably, this is a 20-year partnership that aims to offer primary joint replacements (orthopedic areas of hip, knee and trauma products) and healthcare services in India at low costs (read more: Stryker-IUIH Medicity Program to Deliver Services in India).
Meanwhile, Stryker recently presented preliminary results for the fourth quarter and full-year 2016, per which net sales are expected to be in line with the Zacks Consensus Estimate.
Net sales for the current quarter are expected to be around $3.2 billion, up 16.3% on a year-over-year basis.
For the full year, net sales of $11.3 billion increased 13.9% on a year-over-year basis. Management expects net earnings per diluted share to be at the upper end of the previously stated band of $5.75 to $5.80. Notably, this indicates a rise of 12.3% to 13.3% on a year-over-year basis.
Furthermore, the Sage and Physio-Control buyouts are expected to generate a solid yield of $258 million and $740 million in the fourth quarter and full year, respectively.
Notably, Sage will help Stryker expand in markets like Canada, Europe, Japan and Australia. In fact, per management, the ‘positive chemistry’ between Stryker and Sage will pave way for solid revenue growth in the coming quarters as well.
Stocks to Consider
Here are a few stocks worth considering that, as per our model, have the right combination of elements to post an earnings beat this quarter:
athenahealth Inc. , with an earnings ESP of +7.41% and a Zacks Rank #3. Additionally, the stock represents a positive surprise of almost 66.7% in the last quarter.
Amsurg Corp. , with an earnings ESP of +2.50% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here. Notably, the company posted a positive earnings surprise of 1.9% in the preceding quarter.
DaVita HealthCare Partners (DVA - Free Report) has an earnings ESP of +5.50% and a Zacks Rank #3. We note that the company posted a positive earnings surprise of 10.6% in the last quarter.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see specific recommendations to help you pick today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>