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Can Penumbra (PEN) Spring a Surprise this Earnings Season?
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Penumbra Inc. (PEN - Free Report) is slated to release fourth-quarter 2016 results on Feb 28, after market close.
Last quarter, the company posted a positive earnings surprise of 63.64%. The four-quarter average earnings beat is 115.07%. Let's see how things are shaping up for this announcement.
Factors at Play
Penumbra’s revenues surged 33.3% on a year-over-year basis in the third quarter. This is because of the company’s stellar performance in both the neuro and peripheral vascular spaces. We expect the strong top-line uptrend to continue in the fourth quarter as well.
We are also confident about the company’s raised revenue guidance for 2016. The company expects revenues in the band of $250 million to $255 million. Management currently expects to end the year at the high end or slightly above the high end of that range.
Historically, the company collects significant revenues from its peripheral vascular business. In this regard, the company recently made some presentations at AIMsymposium and VEITHsymposium. Management highlighted its peripheral vascular technologies at these events and also final results from the multicenter PRISM study, designed to assess the safety and efficacy of the IndigoSystem for peripheral and visceral arterial thrombi and emboli. We believe that slow but increasing demand for treatment options in the heart disease market reflects the high growth potential for the company in this niche.
Meanwhile, steady growth in neuro franchise is driven by expansion in the ischemic stroke market as well as sales of Penumbra System which includes ACE, ACE64 and ACE68 introduced lately. Accordingly, Penumbra’s strategy to focus on impactful product development across a varied portfolio may boost investors’ confidence on the stock.
However, foreign exchange headwinds and intense competition from major commercial laboratories and hospitals continue to raise caution. Escalating costs and softer margins also add to the woes. Management also anticipated that the company will not be getting positive results in the near term from its recently launched products.
Earnings Whispers
Our proven model does not conclusively show that Penumbra is likely to beat estimates this quarter. That 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. However, that is not the case here, as you will see below.
Zacks ESP: Penumbra has an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 12 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Penumbra’s Zacks Rank #3 increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may consider as our model shows that they have the right combination of elements to post an earnings beat in the upcoming quarter:
Exelixis, Inc. (EXEL - Free Report) has an Earnings ESP of +200.00% and a Zacks Rank #2.
Zynerba Pharmaceuticals, Inc. has an Earnings ESP of +2.74% and a Zacks Rank #2.
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How would you like to see our best recommendations to help you find 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 >>
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Can Penumbra (PEN) Spring a Surprise this Earnings Season?
Penumbra Inc. (PEN - Free Report) is slated to release fourth-quarter 2016 results on Feb 28, after market close.
Last quarter, the company posted a positive earnings surprise of 63.64%. The four-quarter average earnings beat is 115.07%. Let's see how things are shaping up for this announcement.
Factors at Play
Penumbra’s revenues surged 33.3% on a year-over-year basis in the third quarter. This is because of the company’s stellar performance in both the neuro and peripheral vascular spaces. We expect the strong top-line uptrend to continue in the fourth quarter as well.
Penumbra, Inc. Price and EPS Surprise
Penumbra, Inc. Price and EPS Surprise | Penumbra, Inc. Quote
We are also confident about the company’s raised revenue guidance for 2016. The company expects revenues in the band of $250 million to $255 million. Management currently expects to end the year at the high end or slightly above the high end of that range.
Historically, the company collects significant revenues from its peripheral vascular business. In this regard, the company recently made some presentations at AIMsymposium and VEITHsymposium. Management highlighted its peripheral vascular technologies at these events and also final results from the multicenter PRISM study, designed to assess the safety and efficacy of the IndigoSystem for peripheral and visceral arterial thrombi and emboli. We believe that slow but increasing demand for treatment options in the heart disease market reflects the high growth potential for the company in this niche.
Meanwhile, steady growth in neuro franchise is driven by expansion in the ischemic stroke market as well as sales of Penumbra System which includes ACE, ACE64 and ACE68 introduced lately. Accordingly, Penumbra’s strategy to focus on impactful product development across a varied portfolio may boost investors’ confidence on the stock.
However, foreign exchange headwinds and intense competition from major commercial laboratories and hospitals continue to raise caution. Escalating costs and softer margins also add to the woes. Management also anticipated that the company will not be getting positive results in the near term from its recently launched products.
Earnings Whispers
Our proven model does not conclusively show that Penumbra is likely to beat estimates this quarter. That 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. However, that is not the case here, as you will see below.
Zacks ESP: Penumbra has an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 12 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Penumbra’s Zacks Rank #3 increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may consider as our model shows that they have the right combination of elements to post an earnings beat in the upcoming quarter:
Masimo Corporation (MASI - Free Report) has an Earnings ESP of +3.51% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Exelixis, Inc. (EXEL - Free Report) has an Earnings ESP of +200.00% and a Zacks Rank #2.
Zynerba Pharmaceuticals, Inc. has an Earnings ESP of +2.74% and a Zacks Rank #2.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find 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 >>