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Higher Testing Volume to Aid LabCorp's (LH) Q4 Earnings
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Laboratory Corporation of America Holdings (LH - Free Report) , also known as LabCorp, is slated to report fourth-quarter and full-year 2020 results on Feb 11, before market open.
In the last-reported quarter, the company’s adjusted earnings of $8.68 exceeded the Zacks Consensus Estimate by 58.98%. The company beat estimates in each of the trailing four quarters, the average surprise being 81.32%.
Factors at Play
LabCorp seems to be well poised on its three key strategies — delivering advanced diagnostics, bringing new medicines to patients faster and using technology to improve patient care.
From the middle of November, the company started witnessing continued sales rebound in volumes of base testing as well as COVID-19 testing services. The company’s October update stated that there was further improvement in case content in the month compared to the third-quarter months. Also, strategic acquisitions made during the third quarter including GlobalCare Clinical Trials and snapIoT to increase decentralized clinical trial capabilities contributed to October sales.
Even in spite of that, like other industry participants, the company’s fourth-quarter base-business performance is expected to have registered slower recovery rate compared to the third quarter. This is because the company might have faced the impact of lesser patient visits again from mid of November and December due to the resurgence of COVID-19 infections across the country.
In terms of COVID-19 related testing, the company is expected to have secured high return in the fourth quarter. Till its October update, the company performed approximately 22 million COVID-19 tests, which represented about 19 million PCR tests and over 3 million antibody tests.
Laboratory Corporation of America Holdings Price and EPS Surprise
LabCorp is currently performing COVID-19 testing in more than 20 laboratories across the United States and its capacity is greater than 210,000 PCR tests and over 300,000 antibody tests per day. In the fourth quarter, the company received FDA’s Emergency Use Authorization (EUA) for the Pixel by LabCorp COVID-19 Test Home Collection Kit. The company also partnered with Walgreens to sell this test kit across a broad network and to avail Walgreens’ digital health platform.Considering the increasing number of coronavirus cases through fourth-quarter end, these developments are expected to have contributed to its fourth-quarter segment top line.
Key Q4 Estimates
The Zacks Consensus Estimate for fourth-quarter earnings of $8.05 per share implies an 181.5% rise from the year-ago reported figure. The consensus estimate for revenues is pegged at $3.98 billion, suggesting 34.6% improvement from the prior-year reported number.
What Our Quantitative Model Suggests
Per our proven model, stocks with the combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a good chance of beating estimates. This is exactly the case as you can see:
Earnings ESP: LabCorp has an Earnings ESP of +7.88%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: LabCorp carries a Zacks Rank #3.
Other Stocks Worth a Look
Here are some other medical stocks also worth considering as these too have the right combination of elements to beat on earnings this reporting cycle.
Option Care Health (OPCH - Free Report) has an Earnings ESP of +34.69% and a Zacks Rank of 2, at present.
Vericel Corporation (VCEL - Free Report) has an Earnings ESP of +6.02% and a Zacks Rank of 2, at present.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Shutterstock
Higher Testing Volume to Aid LabCorp's (LH) Q4 Earnings
Laboratory Corporation of America Holdings (LH - Free Report) , also known as LabCorp, is slated to report fourth-quarter and full-year 2020 results on Feb 11, before market open.
In the last-reported quarter, the company’s adjusted earnings of $8.68 exceeded the Zacks Consensus Estimate by 58.98%. The company beat estimates in each of the trailing four quarters, the average surprise being 81.32%.
Factors at Play
LabCorp seems to be well poised on its three key strategies — delivering advanced diagnostics, bringing new medicines to patients faster and using technology to improve patient care.
From the middle of November, the company started witnessing continued sales rebound in volumes of base testing as well as COVID-19 testing services. The company’s October update stated that there was further improvement in case content in the month compared to the third-quarter months. Also, strategic acquisitions made during the third quarter including GlobalCare Clinical Trials and snapIoT to increase decentralized clinical trial capabilities contributed to October sales.
Even in spite of that, like other industry participants, the company’s fourth-quarter base-business performance is expected to have registered slower recovery rate compared to the third quarter. This is because the company might have faced the impact of lesser patient visits again from mid of November and December due to the resurgence of COVID-19 infections across the country.
In terms of COVID-19 related testing, the company is expected to have secured high return in the fourth quarter. Till its October update, the company performed approximately 22 million COVID-19 tests, which represented about 19 million PCR tests and over 3 million antibody tests.
Laboratory Corporation of America Holdings Price and EPS Surprise
Laboratory Corporation of America Holdings price-eps-surprise | Laboratory Corporation of America Holdings Quote
LabCorp is currently performing COVID-19 testing in more than 20 laboratories across the United States and its capacity is greater than 210,000 PCR tests and over 300,000 antibody tests per day. In the fourth quarter, the company received FDA’s Emergency Use Authorization (EUA) for the Pixel by LabCorp COVID-19 Test Home Collection Kit. The company also partnered with Walgreens to sell this test kit across a broad network and to avail Walgreens’ digital health platform.Considering the increasing number of coronavirus cases through fourth-quarter end, these developments are expected to have contributed to its fourth-quarter segment top line.
Key Q4 Estimates
The Zacks Consensus Estimate for fourth-quarter earnings of $8.05 per share implies an 181.5% rise from the year-ago reported figure. The consensus estimate for revenues is pegged at $3.98 billion, suggesting 34.6% improvement from the prior-year reported number.
What Our Quantitative Model Suggests
Per our proven model, stocks with the combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a good chance of beating estimates. This is exactly the case as you can see:
Earnings ESP: LabCorp has an Earnings ESP of +7.88%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: LabCorp carries a Zacks Rank #3.
Other Stocks Worth a Look
Here are some other medical stocks also worth considering as these too have the right combination of elements to beat on earnings this reporting cycle.
Charles River Laboratories International (CRL - Free Report) currently has a Zacks Rank #2 and an Earnings ESP of +8.55%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Option Care Health (OPCH - Free Report) has an Earnings ESP of +34.69% and a Zacks Rank of 2, at present.
Vericel Corporation (VCEL - Free Report) has an Earnings ESP of +6.02% and a Zacks Rank of 2, at present.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>