The third-quarter earnings picture so far has shown healthier results for the
Medical sector compared to the first two quarters of 2020. In fact, this season, the space has shown better resilience compared to many others amid the coronavirus-led economic rout. Per the latest Earnings Preview, it is one of the seven sectors expected to report earnings and revenue growth in the third quarter out of the 16 broad Zacks sectors within the Zacks Industry classification.
The Medical sector’s scorecard (82.6% of the sector’s total market cap having already reported their quarterly numbers) so far reflects 13.1% earnings growth on 12.6% upside in revenues. Overall, earnings are projected to grow 12.3% (Q2 reported growth was 4.7%) on 11% revenue growth (growth of 2.6% in Q2).
Integral to the broader Medical sector,
Medical Products companies’ collective business growth is likely to have improved from the last reported quarter with month-wise rebound in base sales volumes on gradual lifting of restrictions in many states and regions. In the third quarter, these companies invested in virtual physician education, remote clinical support and digital sales enablement suitable for healthcare support amid the pandemic. Testing, vaccine and therapeutic makers are riding on huge market adoption of their COVID-19-related healthcare-support products and services.
Many of these companies have come up with bullish earnings reports so far this reporting cycle.
However, some of the companies, particularly those with a huge international base witnessed a notable reduction in product demand across their core business segments and geographies in Q3 as well.
The Zacks Medical Product sector currently carries a Zacks Sector Rank in the bottom 33% (169 of 253 industries).
Let’s take a look at three Medical Product market leaders scheduled to announce results on Nov 6.
Zimmer Biomet Holdings, Inc. ( ZBH Quick Quote ZBH - Free Report) : Following a dull second quarter where non-elective healthcare procedures were postponed largely to prioritize coronavirus-led damage control, the third-quarter results are expected to reflect a sort of rebound for Zimmer Biomet on gradual reopening of the economy. The company is optimistic about recovery in procedure volumes in the United States. Per the last update, this trend was prominent in July, even in some of the states with rising COVID-19 numbers like Florida, Texas and Arizona.
The Zacks Consensus Estimate for the third quarter is pegged at earnings per share of $1.05. Revenues are expected to be $1.71 billion.
Zimmer Biomet has the right combination of the two key ingredients — a positive
Earnings ESP and a Zacks Rank #3 (Hold) or higher — which increases the odds of an earnings beat. It has an Earnings ESP of +4.10% and a Zacks Rank #3.
You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter.
You can see
. the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Zimmer Biomet to Report Q3 Earnings: What's in Store?) Zimmer Biomet Holdings, Inc. Price and EPS Surprise Zimmer Biomet Holdings, Inc. price-eps-surprise | Zimmer Biomet Holdings, Inc. Quote Hill-Rom Holdings ( HRC Quick Quote HRC - Free Report) : Hill-Rom’s fourth-quarter fiscal 2020 domestic sales are expected to have suffered due to pandemic-led business disruptions despite. Surgical Solutions might have faced issues like project delays, limited hospital access for installations and the surgical consumables divestiture. The Zacks Consensus Estimate for the fourth quarter is pegged at earnings per share of $1.08. Revenues are expected to be $697.3 million.
Hill-Rom has an Earnings ESP of +2.78% and a Zacks Rank #5 (Strong Sell).
HMS Holdings Corp ( HMSY Quick Quote HMSY - Free Report) : In the third quarter, the company might have once again face the impact of COVID-19 in the form of lower medical utilization, certain client work pauses, and shifts in industry focus. However, the company earlier stated about an expected revenue ramp up in the quarter with a sequential increases in volumes.The Zacks Consensus Estimate for the third quarter is pegged at earnings per share of 30 cents. Revenues are expected to be $171 million.
HMS Holdings has an Earnings ESP of 0.00% and a Zacks Rank #3.
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