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Integra LifeSciences (IART) Q1 Earnings: A Beat in Store?
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We expect Integra LifeSciences Holdings Corporation (IART - Free Report) to beat expectations when it reports its first-quarter 2017 results, after market close on Apr 26.
Last quarter, the company’s earnings met the Zacks Consensus Estimate. In fact, in the last four quarters, Integra’s earnings outpaced the Zacks Consensus Estimate at an average of 3.02%. Let’s see how things are shaping up prior to this announcement.
Why a Likely Positive Surprise?
Our proven model shows that Integra is likely to beat earnings because it has the perfect combination of two key ingredients.
Integra LifeSciences Holdings Corporation Price and EPS Surprise
Zacks ESP: Integra has an Earnings ESP of +7.50% as the Most Accurate estimate is pegged at 43 cents while the Zacks Consensus Estimate is at 40 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Integra currently carries a Zacks Rank #3 (Hold). Note that stocks with Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates.
Conversely, 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.
The combination of Integra’s Zacks Rank #3 and +7.50% ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-Than-Expected Earnings?
Management has adopted a 3-pillar strategy to optimize, execute and accelerate growth. Integra aims to expand economies of scale in the wake of escalating operating expenses. Also, the company aims to expand through inorganic means through profitable integration of new products and businesses and also organically.
In line with the core growth strategy, Integra is on a buyout spree. Also, post the fourth quarter of 2016, the company launched several regenerative products such as CUSA Clarity ultrasonic tissue ablation platform and Titan Press-Fit Reverse Shoulder for Fracture. The company also announced full commercial availability of its Cadence Total Ankle System, a new ankle prosthesis developed in partnership with four world leading foot and ankle surgeons. Management is hopeful that synergies from these new products will be reflected in the first quarter’s top-line results.
We are also encouraged by Integra’s consistent growth at its Specialty Surgical Solution segment on account of its core expertise in neurosurgery. The segment experienced strong 7% revenue growth in the previously reported fourth quarter 2016. Management is also investing substantially in the segment to drive growth. We expect the strong top-line uptrend to continue in the upcoming first quarter as well.
The company’s decision to acquire Codman Neurosurgery (from Johnson & Johnson) and Derma Sciences have already boosted the market sentiment. We believe, post completion, these strategic buyouts should bolster Integra’s business further within Specialty Surgical space.
Meanwhile, Integra issued a fiscal 2017 guidance. The company currently projects 2017 revenues in the range of $1.12 billion to $1.14 billion, representing growth of 12.5% to 15.5% and organic sales growth between 7% and 8.5%. For the first quarter of 2017, revenues are expected in the band of $252 million to $256 million, representing 5% to 6% organic growth.
On the flip side, in the last three months, Integra has been trading below the Zacks categorized Medical - Biomedical and Genetics sub-industry. The stock lost 3.5%, wider than the 1.2% decline of the broader industry. Factors such as rising operating expenses and pre-closing costs related to the Codman Neurosurgery acquisition are believed to have had a negative impact on Integra’s share price.
Also, currency fluctuation and intense competition are major headwinds that are likely to linger.
Other Stocks to Consider
Here are some other companies you may consider as our model shows that they also have the right combination of elements to post an earnings beat in the upcoming quarter:
Hill-Rom Holdings Inc has an Earnings ESP of +1.27% and a Zacks Rank #2.
Syros Pharmaceuticals, Inc. (SYRS - Free Report) has an Earnings ESP of +3.85% and a Zacks Rank #2.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
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Integra LifeSciences (IART) Q1 Earnings: A Beat in Store?
We expect Integra LifeSciences Holdings Corporation (IART - Free Report) to beat expectations when it reports its first-quarter 2017 results, after market close on Apr 26.
Last quarter, the company’s earnings met the Zacks Consensus Estimate. In fact, in the last four quarters, Integra’s earnings outpaced the Zacks Consensus Estimate at an average of 3.02%. Let’s see how things are shaping up prior to this announcement.
Why a Likely Positive Surprise?
Our proven model shows that Integra is likely to beat earnings because it has the perfect combination of two key ingredients.
Integra LifeSciences Holdings Corporation Price and EPS Surprise
Integra LifeSciences Holdings Corporation Price and EPS Surprise | Integra LifeSciences Holdings Corporation Quote
Zacks ESP: Integra has an Earnings ESP of +7.50% as the Most Accurate estimate is pegged at 43 cents while the Zacks Consensus Estimate is at 40 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Integra currently carries a Zacks Rank #3 (Hold). Note that stocks with Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates.
Conversely, 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.
The combination of Integra’s Zacks Rank #3 and +7.50% ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-Than-Expected Earnings?
Management has adopted a 3-pillar strategy to optimize, execute and accelerate growth. Integra aims to expand economies of scale in the wake of escalating operating expenses. Also, the company aims to expand through inorganic means through profitable integration of new products and businesses and also organically.
In line with the core growth strategy, Integra is on a buyout spree. Also, post the fourth quarter of 2016, the company launched several regenerative products such as CUSA Clarity ultrasonic tissue ablation platform and Titan Press-Fit Reverse Shoulder for Fracture. The company also announced full commercial availability of its Cadence Total Ankle System, a new ankle prosthesis developed in partnership with four world leading foot and ankle surgeons. Management is hopeful that synergies from these new products will be reflected in the first quarter’s top-line results.
We are also encouraged by Integra’s consistent growth at its Specialty Surgical Solution segment on account of its core expertise in neurosurgery. The segment experienced strong 7% revenue growth in the previously reported fourth quarter 2016. Management is also investing substantially in the segment to drive growth. We expect the strong top-line uptrend to continue in the upcoming first quarter as well.
The company’s decision to acquire Codman Neurosurgery (from Johnson & Johnson) and Derma Sciences have already boosted the market sentiment. We believe, post completion, these strategic buyouts should bolster Integra’s business further within Specialty Surgical space.
Meanwhile, Integra issued a fiscal 2017 guidance. The company currently projects 2017 revenues in the range of $1.12 billion to $1.14 billion, representing growth of 12.5% to 15.5% and organic sales growth between 7% and 8.5%. For the first quarter of 2017, revenues are expected in the band of $252 million to $256 million, representing 5% to 6% organic growth.
On the flip side, in the last three months, Integra has been trading below the Zacks categorized Medical - Biomedical and Genetics sub-industry. The stock lost 3.5%, wider than the 1.2% decline of the broader industry. Factors such as rising operating expenses and pre-closing costs related to the Codman Neurosurgery acquisition are believed to have had a negative impact on Integra’s share price.
Also, currency fluctuation and intense competition are major headwinds that are likely to linger.
Other Stocks to Consider
Here are some other companies you may consider as our model shows that they also have the right combination of elements to post an earnings beat in the upcoming quarter:
Galectin Therapautics, Inc. (GALT - Free Report) has an Earnings ESP of +13.33% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Hill-Rom Holdings Inc has an Earnings ESP of +1.27% and a Zacks Rank #2.
Syros Pharmaceuticals, Inc. (SYRS - Free Report) has an Earnings ESP of +3.85% and a Zacks Rank #2.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>