Weight management products and service provider, Nutrisystem Inc. is scheduled to release third-quarter 2016 results on Oct 26. In the last reported quarter, the company had posted a positive surprise of 5.9%. On average, Nutrisystem outperformed the Zacks Consensus Estimate by 25.1% over the last four quarters.
Let’s see how things are shaping up for this announcement.
Factors at Play
Nutrisystem’s innovative products are expected to expand its customer base that will eventually drive reactivation revenues (generated from existing customers after the first nine months of their purchase). However, a sluggish dieting market and intensifying competition are primary headwinds for the near term.
For the third quarter of 2016, management expects revenues in the range of $113 million to $118 million. Meanwhile, adjusted EBITDA is forecast in the range of $15.6 million to $17.6 million. Earnings per share are expected in the band of 23 to 28 cents per share, including expense of 5 cents per share related to the South Beach Diet and Shake360 initiatives.
Earnings Whispers
Our proven model does not conclusively show that Nutrisystem is likely to beat on earnings 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. That is not the case here as you will see below.
Zacks ESP: Nutrisystem has an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 31 cents per share.
Zacks Rank: Nutrisystem carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Ariad Pharmaceuticals Inc. , with an Earnings ESP of +5.26% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here. Additionally, the stock represents a stellar one-year return of 52.7%.
Exelixis Inc. (EXEL - Free Report) , with an Earnings ESP of +7.69% and a Zacks Rank #1. Notably, the company has a stupendous one-year return of 99.7%.
Glaukos Corporation (GKOS - Free Report) has an Earnings ESP of +200.00% and a Zacks Rank #1. We note that the company represents an impressive one-year return of 58.83%.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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Weight management products and service provider, Nutrisystem Inc. is scheduled to release third-quarter 2016 results on Oct 26. In the last reported quarter, the company had posted a positive surprise of 5.9%. On average, Nutrisystem outperformed the Zacks Consensus Estimate by 25.1% over the last four quarters.
Let’s see how things are shaping up for this announcement.
Factors at Play
Nutrisystem’s innovative products are expected to expand its customer base that will eventually drive reactivation revenues (generated from existing customers after the first nine months of their purchase). However, a sluggish dieting market and intensifying competition are primary headwinds for the near term.
For the third quarter of 2016, management expects revenues in the range of $113 million to $118 million. Meanwhile, adjusted EBITDA is forecast in the range of $15.6 million to $17.6 million. Earnings per share are expected in the band of 23 to 28 cents per share, including expense of 5 cents per share related to the South Beach Diet and Shake360 initiatives.
Earnings Whispers
Our proven model does not conclusively show that Nutrisystem is likely to beat on earnings 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. That is not the case here as you will see below.
Zacks ESP: Nutrisystem has an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 31 cents per share.
Zacks Rank: Nutrisystem carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Ariad Pharmaceuticals Inc. , with an Earnings ESP of +5.26% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here. Additionally, the stock represents a stellar one-year return of 52.7%.
Exelixis Inc. (EXEL - Free Report) , with an Earnings ESP of +7.69% and a Zacks Rank #1. Notably, the company has a stupendous one-year return of 99.7%.
Glaukos Corporation (GKOS - Free Report) has an Earnings ESP of +200.00% and a Zacks Rank #1. We note that the company represents an impressive one-year return of 58.83%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand.Click to see them now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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