Back to top

Image: Bigstock

Will Obalon's (OBLN) Q3 Earnings Reflect Growth in U.S.?

Read MoreHide Full Article

Obalon Therapeutics, Inc. is scheduled to report third-quarter 2018 results on Nov 2, after the market closes.

Last reported quarter, the company’s earnings per share topped the Zacks Consensus Estimate by 214%. It delivered positive surprises in two of the trailing four quarters with the average beat being 32.4%.

Let’s see, how things are shaping up prior to this announcement.

Factors at Play

In the third quarter, Obalon is expected to register strong U.S. revenues on the back of increased reorders from existing accounts and new order bookings. Per Obalon, it is meaningfully working on value creation within the United States and plans to continue making this geographical region its highest priority for 2018 and beyond.

Meanwhile, International sales are expected to see a strong revenue contribution from its current-generation six-month duration Obalon Balloon product to the company’s Middle East distributor. Notably, in the second quarter, the company registered international sales of $1.2 million as compared to about $800,000 during the first quarter. This uptrend is expected to get reflected in the third quarter numbers as well.

Earlier this year, the company expanded its long-term relationship with Sono Bello within retail medicine. According to Obalon, Sono Bello has further extended the number of accounts treating, thereby improving the company’s retail medicine capabilities. We expect this to further positively impact the company’s yet-to-be-reported quarter’s figures.

OBALON THERPTCS Price and EPS Surprise

OBALON THERPTCS Price and EPS Surprise | OBALON THERPTCS Quote

In the last few quarters, Obalon faced clinical logistics issues (time and cost associated with the account initiation) related to the acquisition of new account. However, in the second quarter, the company developed new value-added partnership programs to reduce the burden of clinical logistics for a potential new account. This includes plans to help the company acquire x-ray imaging until Obalon Navigation becomes available in the United States. The same should also leave a favorable effect on the company’s third-quarter new order result.

Here’s What Our Quantitative Model Predicts

Our proven Zacks model indicates that a company with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has maximum chances of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Obalon has a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s Earnings ESP of 0.00% makes surprise prediction difficult. Thus, this combination fails to forecast an earnings beat.

Stocks Worth a Look

Here are a few medical stocks worth considering with the right combination of elements to beat on earnings in the upcoming quarterly results.

Haemonetics Corporation (HAE - Free Report) has an Earnings ESP of +5.56% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Humana Inc. (HUM - Free Report) has an Earnings ESP of +2.22% and a Zacks Rank #2.

Natera, Inc. (NTRA - Free Report) has an Earnings ESP of +6.01% and a Zacks Rank of 2.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>


Unique Zacks Analysis of Your Chosen Ticker


Pick one free report - opportunity may be withdrawn at any time


Humana Inc. (HUM) - $25 value - yours FREE >>

Haemonetics Corporation (HAE) - $25 value - yours FREE >>

Natera, Inc. (NTRA) - $25 value - yours FREE >>

Published in