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Patterson Companies (PDCO) Q4 Earnings: What's in Store?

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Patterson Companies Inc. (PDCO - Free Report) is set to report fiscal fourth-quarter 2017 results on May 25, before the opening bell.

The company does not have an impressive track of beat in the trailing four quarters. In the last reported quarter, it recorded a positive earnings surprise of 1.75%, bringing the four-quarter average to a negative 1.28%. Let’s see how things are shaping up prior to this quarter.

Factors at Play

We believe a growing and diversified product portfolio, strong veterinary business prospects, accretive acquisitions and strategic partnerships are the key catalysts for the company in the fourth quarter.

However on the flip side, with Patterson Companies reporting a significant percentage of its sales from the international market, the company remains highly exposed to currency fluctuations. Unfavorable currency movement has been a major dampener for the company over the last few quarters and the fourth quarter is unlikely to be an exception.

Over the past three months, Patterson Companies lost almost 7.22%, in sharp contrast to the Zacks categorized Medical Instruments sub-industry’s gain of roughly 7.05%. Let’s see how things are shaping up prior to this announcement.

Overall activities of Patterson Companies during the fourth quarter were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for the to-be-reported quarter fell to 64 cents from 66 cents per share in the last 90 days.

A glimpse at the stock’s price performance over the past three months reveals a loss of almost 4.08%. The stock’s current return thus compares unfavorably with the Zacks categorized Medical/Dental-Supplies sub-industry’s return of 5.09% over the same time.

Earnings Whispers
    
Our proven model does not conclusively show that Patterson Companies is likely to beat on earnings 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. This is not the case here, as you will see below:

Zacks ESP: Patterson Companies currently has an Earnings ESP of 0.00%. That is because the Most Accurate estimate and the Zacks Consensus Estimate stand at 64 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Patterson Companies currently carries a Zacks Rank #4 (Sell) which decreases the predictive power of ESP. The company’s 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some better-ranked companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat:

Best Buy Co. Inc. (BBY - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3. On average, the stock delivered a positive surprise of almost 27.70% in the last four quarters.

Global Partners LP (GLP - Free Report) delivered a positive surprise of almost 96.55% in the trailing four quarters. It has an Earnings ESP of +233.33% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Raymond James Financial, Inc. (RJF - Free Report) has an Earnings ESP of +3.45% and a Zacks Rank #1. The stock delivered a positive surprise of almost 14.4% in the last four quarters.

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