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STAAR Surgical (STAA) to Report Q2 Earnings: What's in Store?

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STAAR Surgical Company (STAA - Free Report) is scheduled to report second-quarter 2020 results on Aug 5, after the closing bell.

In the last-reported quarter, the company’s earnings per share (EPS) of 4 cents lagged the Zacks Consensus Estimate by 42.9%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and lagged in one, the average beat being 82.62%.

Let’s see how things have shaped up prior to this announcement.

Factors at Play

As confirmed by STAAR Surgical during its first-quarter earnings call in May, the company recorded robust growth despite challenges posed by the pandemic. Since the end of the first quarter, the company’s global implantable Collamer lens (“ICL”) unit started to show strong momentum in Asia. This is expected to have contributed to the second-quarter top line. Per the company’s business update provided in April, Asia witnessed robust growth in ICL units. However, the company is likely to have been adversely impacted in those geographies that reopened their clinics and practices in late May and through June.

STAAR Surgical Company Price and EPS Surprise

 

STAAR Surgical Company Price and EPS Surprise

STAAR Surgical Company price-eps-surprise | STAAR Surgical Company Quote

Over the past few months, apart from Asia, Canada and Germany have been seeing strength in ICL units. Meanwhile, the company confirmed to have resumed production in its California manufacturing facilities since April-end. All these are likely to have contributed to the top line.

STAAR Surgical has confirmed the renewal of EVO lenses by Brazil's health regulatory agency, Anvisa. Following this, the company resumed sales in Brazil, which is the largest refractive surgery market in Latin America, during the second quarter of 2020. However, management is apprehensive about the potential impact of COVID-19 on surgeons or patients. Adverse sales impact due to the pandemic is likely to have weighed on the top line.

Meanwhile, the company expects to have benefited from the gradual easing of stay-at-home orders, which are likely to have boosted EVO ICL procedures. In fact, per the earnings call in May, orders have already picked up in China and procedures are underway. This is likely to have significantly boosted the top line.

We anticipate the pandemic to have significantly boosted demand for STAAR Surgical’s EVO family of lenses in the second quarter due to widespread personal hygiene guidelines related to the pandemic as well as patients’ fears of losing or running out of contact lenses. This is likely to get reflected in the company’s results for the to-be-reported quarter.

The Estimate Picture

For second-quarter 2020, the Zacks Consensus Estimate for total revenues of $37.6 million implies a decline of 5.2% from the prior-year reported figure. Also, the consensus estimate for EPS is pegged at 4 cents, implying a decline of 71.4% from the prior-year reported figure.

What Our Model Suggests

Per our proven model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive earnings surprise. However, this is not the case here as you can see:

Zacks Rank: The company currently carries a Zacks Rank #3.

Earnings ESP: STAAR Surgical has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks Worth a Look

Here are a few medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle. All the stocks currently carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Integra LifeSciences Holdings Corporation (IART - Free Report) has an Earnings ESP of +20.69%.

Exact Sciences Corporation (EXAS - Free Report) has an Earnings ESP of +6.69%.

IDEXX Laboratories, Inc. (IDXX - Free Report) has an Earnings ESP of +18.14%.

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