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Med-Product Stocks Aug 8 Earnings Roster: HSIC, AGIO & More

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We are at the last lap of Q2 earnings season and per the Earnings Preview, till Aug 4, around 420 S&P 500 members (86.7% of the Index’s total market cap) have reported their quarterly numbers.

Putting together these results, we can see that the pace of earnings and revenue growth is steadily accelerating from relative-to-pre-season expectations. The latest scorecard shows an 11.6% year-over-year increase in total earnings for these members on 5.6% higher revenues. The earnings beat ratio was 74.5% and the revenue beat ratio was 69.2%.

What’s in Store for the Medical Space?

Medical, one of the 16 broader Zacks sectors, is absolutely no exception to this improvement trend. So far, 83.6% of the members from this sector have released the quarterly earnings results with earnings and revenue beats registered at impressive levels of 87% and 69.6%, respectively. With more and more companies lining up for their earnings announcement, the aggregate growth pace of this sector is expected to pick up further.

Notably, the medical device industry boasts some powerful long-term tailwinds, including mergers & acquisitions (M&A), emerging market expansion, positive demographic trends and new product innovation. These have been a major driving force behind the sector’s laudable performance over the past few quarters even amid severe socio-economic and political instabilities.

Let’s find out how five major Medical – Products companies within the broader Medical space are placed ahead of their earnings releases on Aug 8.

Henry Schein, Inc. (HSIC - Free Report) : This renowned healthcare products and service distributor’s strategy to expand digital dentistry globally is encouraging. Notably, management expects at least mid-single digit growth in North America’s dental equipment market in the second quarter. The company is currently banking on digital dentistry as part of its strategic plan. It is thus busy promoting digital workflows for general dentistry as well as dental specialties.

Henry Schein is scheduled to report second-quarter 2017 results before the market opens.However, our proven model does not conclusively show that the company 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. But that is not the case here as the stock currently carries a Zacks Rank #2 with an Earnings ESP of 0.00%, which makes surprise prediction difficult.

Based on the Zacks methodology, a positive Zacks ESP serves as a leading indicator of a likely earnings surprise, while a bullish Zacks Rank increases the predictive power of the ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

(Read More: Can Henry Schein Spring a Surprise in Q2 Earnings?)

 

Agios Pharmaceuticals, Inc. (AGIO - Free Report) : As a development-stage company, Agios has not approved of products in its portfolio yet. Investors are thus expected to keep an eye on pipeline updates at the earnings call. It is worth mentioning that the company has several interesting pipeline candidates. Its cancer pipeline comprises Idhifa (enasidenib), AG-120 (IDH1 mutant inhibitor) and AG-881 (pan-IDH mutant inhibitor). Importantly, Agios is developing enasidenib and AG-881 in collaboration with Celgene Corporation (CELG - Research Report), which should bring in collaboration revenues. Agios Pharmaceuticals is scheduled to report second-quarter 2017 results on Aug 8. 

In our previous article, (What's in Store for Agios Pharma in Q2 Earnings?), we were not certain of an earnings beat this season. However, estimates changed thereafter. The company currently carries a Zacks Rank #3 with an Earnings ESP of +1.99%, which makes us confident about a positive earnings surprise. Hence, we expect it to beat estimates this quarter.

We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement.  

 

Penumbra Inc. (PEN - Free Report) : We are content with the company’s focus on product development and innovation which should get reflected in the second quarter itself. Significantly, research and development expenses surged 40.1% in the first quarter. In line with this, the company introduced a product under the Indigo family, CAT-D. Also, the company recently received an FDA clearance for 3D revascularization device within its neuro franchise segment.

The company is scheduled to report second-quarter 2017 earnings after the market closes. It currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s Earnings ESP of 0.00% makes surprise prediction difficult. Hence, we are unable to conclude if Penumbra is likely to beat on earnings this quarter.

(Read More: Is a Surprise in Store for Penumbra in Q2 Earnings?)

You can see the complete list of today's Zacks #1 Rank stocks here.

Penumbra, Inc. Price and Consensus

Penumbra, Inc. Price and Consensus | Penumbra, Inc. Quote

 

OPKO Health, Inc. (OPK - Free Report) : This is a multinational biopharmaceutical and diagnostics company. Its diagnostics business includes Bio-Reference Laboratories, the nation’s third-largest clinical laboratory with a core genetic testing business. Its pharmaceutical business features RAYALDEE, an FDA-approved treatment for SHPT in stage 3-4 CKD patients with vitamin D deficiency and VARUBI for chemotherapy-induced nausea and vomiting among others.

The company is also scheduled to report second-quarter 2017 earnings after the closing bell. It currently carries a Zacks Rank #2 and an Earnings ESP of 0.00%.

 

STERIS Plc (STE - Free Report) : Headquartered in Ohio, STERIS develops, manufactures and markets infection prevention, decontamination, microbial reduction, plus surgical and gastrointestinal support products and services.

The company is scheduled to report first-quarter fiscal 2018 earnings before the opening bell. It currently carries a Zacks Rank #2, which though increases the predictive power of ESP, its Earnings ESP of -1.25% however leaves our earnings surprise prediction inconclusive.

STERIS PLC Price and Consensus

STERIS PLC Price and Consensus | STERIS PLC Quote

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