Varian Medical Systems Inc. is set to report results for the first quarter of fiscal 2017 on Jan 25, after the closing bell.
Last quarter, the company reported earnings of $1.38 per share, which beat the Zacks Consensus Estimate by three cents. Notably, the figure improved 32.7% on a year-over-year basis.
We note that on average, Varian Medical posted a positive earnings surprise of 3.47% over the last four quarters. Over the same time frame, Varian Medical returned almost 18.22%, which is higher than the Zacks categorized Medical Instruments sub-industry’s gain of roughly 9.28%. Also, Varian Medical has a decent earnings surprise history, as evident from the chart below:
Factors at Play
We are particularly upbeat about Varian’s oncology business prospects. Notably, the company has been addressing both the tier 1 and mid-tier markets through its Edge, Truebeam and VitalBeam products and has also been winning international contracts in the oncology space. For the first quarter of fiscal 2017, Varian expects adjusted earnings in the range of $1.03–$1.07 per share. Revenues are expected to increase about 1% to 2% in fiscal 2017.
We believe China and Africa present significant top-line growth opportunities in the near term. The company is opening new offices in Africa and the Middle East, which shows that it is aware of the growth opportunities in the region. Moreover, Varian’s strong product pipeline is a key growth catalyst. The company believes that the Proton system has massive growth opportunities.
Nevertheless, increasing local competition is the primary headwind. Moreover, the Imaging Components’ business spin-off will remain an overhang on the stock, at least in the near term.
Earnings Whispers
Our proven model does not conclusively show that Varian Medical 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: Varian Medical currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.05. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Varian Medical carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Please note that 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 revision.
Stocks to Consider
Here are some companies you may consider as our model shows that they have the right combination of elements to post an earnings beat in the upcoming quarter:
athenahealth Inc. , with an Earnings ESP of +7.41% and a Zacks Rank #3. Additionally, the stock witnessed a positive surprise of almost 66.7% last quarter.
Amsurg Corp. , with an Earnings ESP of +2.50% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here. Notably, the company delivered a positive earnings surprise of 1.9% in the preceding quarter.
DaVita HealthCare Partners (DVA - Free Report) has an Earnings ESP of +5.50% and a Zacks Rank #3. The company delivered a positive earnings surprise of 10.6% last quarter.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
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 >>
Varian Medical Systems Inc. is set to report results for the first quarter of fiscal 2017 on Jan 25, after the closing bell.
Last quarter, the company reported earnings of $1.38 per share, which beat the Zacks Consensus Estimate by three cents. Notably, the figure improved 32.7% on a year-over-year basis.
We note that on average, Varian Medical posted a positive earnings surprise of 3.47% over the last four quarters. Over the same time frame, Varian Medical returned almost 18.22%, which is higher than the Zacks categorized Medical Instruments sub-industry’s gain of roughly 9.28%. Also, Varian Medical has a decent earnings surprise history, as evident from the chart below:
Factors at Play
We are particularly upbeat about Varian’s oncology business prospects. Notably, the company has been addressing both the tier 1 and mid-tier markets through its Edge, Truebeam and VitalBeam products and has also been winning international contracts in the oncology space. For the first quarter of fiscal 2017, Varian expects adjusted earnings in the range of $1.03–$1.07 per share. Revenues are expected to increase about 1% to 2% in fiscal 2017.
We believe China and Africa present significant top-line growth opportunities in the near term. The company is opening new offices in Africa and the Middle East, which shows that it is aware of the growth opportunities in the region. Moreover, Varian’s strong product pipeline is a key growth catalyst. The company believes that the Proton system has massive growth opportunities.
Nevertheless, increasing local competition is the primary headwind. Moreover, the Imaging Components’ business spin-off will remain an overhang on the stock, at least in the near term.
Earnings Whispers
Our proven model does not conclusively show that Varian Medical 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: Varian Medical currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.05. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Varian Medical carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Please note that 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 revision.
Stocks to Consider
Here are some companies you may consider as our model shows that they have the right combination of elements to post an earnings beat in the upcoming quarter:
athenahealth Inc. , with an Earnings ESP of +7.41% and a Zacks Rank #3. Additionally, the stock witnessed a positive surprise of almost 66.7% last quarter.
Amsurg Corp. , with an Earnings ESP of +2.50% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here. Notably, the company delivered a positive earnings surprise of 1.9% in the preceding quarter.
DaVita HealthCare Partners (DVA - Free Report) has an Earnings ESP of +5.50% and a Zacks Rank #3. The company delivered a positive earnings surprise of 10.6% last quarter.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
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 >>
Get the latest research report on DVA - FREE