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Pacific Biosciences (PACB): What Awaits in Q4 Earnings?
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Pacific Biosciences of California Inc. (PACB - Free Report) is scheduled to report fourth-quarter 2016 results on Feb 1, 2017.
Pacific Biosciences has an impressive track of comfortably beating estimates in each of the four trailing quarters. In the last reported quarter, it recorded a positive earnings surprise of 5.00%, bringing the four-quarter average to 3.43%. Over the past one month, Pacific Biosciences returned almost 25.79%, which is higher than the Zacks categorized Medical Instruments sub-industry’s gain of roughly 3.52%. Also, Pacific Biosciences has a decent earnings surprise history, as evident from the chart below.
Factors Influencing This Quarter
Management is apprehensive that performance would be affected during the fourth quarter owing to Pacific Biosciences registering lower instrument bookings resulting in a decline in backlog. For the above-mentioned reasons, management is apprehensive that it might fail to achieve its revenue target of $93 million in full-year 2016. Currently, total revenue for the year is projected in the band of $86 million to $90 million. Also, for the fourth quarter, the company expects contractual revenues to decrease by $23.5 million on a year-over-year basis.
Owing to the above reasons, the company forecasts product and service revenue growth between 55% and 65% for the year compared with the previous forecast of a 70% increase. For the full year, management expects average gross margin percentage to be less than 50%. In fact, operating expense is forecast to increase in the band of 10% to 12%.
Overall, the company’s activities during the October–December period were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for the fourth quarter deteriorated to a loss of 23 cents from a loss of 20 cents per share over the last 90 days.
Earnings Whispers
Our proven model does not conclusively show that Pacific Biosciences is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP for Pacific Biosciences is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 23 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Pacific Biosciences carries a Zacks Rank #3, which increases the predictive power of ESP; but when combined with a 0.00% ESP, surprise prediction difficult becomes difficult.
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.
Stocks That Warrant a Look
Here are some medical stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.
DaVita HealthCare Partners Inc. (DVA - Free Report) has an Earnings ESP of +4.40% and a Zacks Rank #3. Additionally, on an average, the stock represented a positive surprise of almost 3.77% in the last four trailing quarters.
Envision Healthcare Corporation has 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. The stock posted a positive earnings surprise of 1.92% in the last reported quarter.
HCA Holdings, Inc. (HCA - Free Report) has an Earnings ESP of +1.12% and a Zacks Rank #3. The stock posted an earnings beat in the last four trailing quarters, the average being 14.01%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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Pacific Biosciences (PACB): What Awaits in Q4 Earnings?
Pacific Biosciences of California Inc. (PACB - Free Report) is scheduled to report fourth-quarter 2016 results on Feb 1, 2017.
Pacific Biosciences has an impressive track of comfortably beating estimates in each of the four trailing quarters. In the last reported quarter, it recorded a positive earnings surprise of 5.00%, bringing the four-quarter average to 3.43%. Over the past one month, Pacific Biosciences returned almost 25.79%, which is higher than the Zacks categorized Medical Instruments sub-industry’s gain of roughly 3.52%. Also, Pacific Biosciences has a decent earnings surprise history, as evident from the chart below.
Factors Influencing This Quarter
Management is apprehensive that performance would be affected during the fourth quarter owing to Pacific Biosciences registering lower instrument bookings resulting in a decline in backlog. For the above-mentioned reasons, management is apprehensive that it might fail to achieve its revenue target of $93 million in full-year 2016. Currently, total revenue for the year is projected in the band of $86 million to $90 million. Also, for the fourth quarter, the company expects contractual revenues to decrease by $23.5 million on a year-over-year basis.
Owing to the above reasons, the company forecasts product and service revenue growth between 55% and 65% for the year compared with the previous forecast of a 70% increase. For the full year, management expects average gross margin percentage to be less than 50%. In fact, operating expense is forecast to increase in the band of 10% to 12%.
Overall, the company’s activities during the October–December period were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for the fourth quarter deteriorated to a loss of 23 cents from a loss of 20 cents per share over the last 90 days.
Earnings Whispers
Our proven model does not conclusively show that Pacific Biosciences is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP for Pacific Biosciences is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 23 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Pacific Biosciences carries a Zacks Rank #3, which increases the predictive power of ESP; but when combined with a 0.00% ESP, surprise prediction difficult becomes difficult.
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.
Stocks That Warrant a Look
Here are some medical stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.
DaVita HealthCare Partners Inc. (DVA - Free Report) has an Earnings ESP of +4.40% and a Zacks Rank #3. Additionally, on an average, the stock represented a positive surprise of almost 3.77% in the last four trailing quarters.
Envision Healthcare Corporation has 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. The stock posted a positive earnings surprise of 1.92% in the last reported quarter.
HCA Holdings, Inc. (HCA - Free Report) has an Earnings ESP of +1.12% and a Zacks Rank #3. The stock posted an earnings beat in the last four trailing quarters, the average being 14.01%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>