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What's in Store for Fulgent Genetics (FLGT) in Q2 Earnings?

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Fulgent Genetics, Inc. (FLGT - Free Report) is set to report second-quarter 2021 results on Aug 9, after market close.

In the last reported quarter, the company’s earnings of $6.59 beat the Zacks Consensus Estimate by 10.02%. Over the trailing four quarters, its earnings outperformed the consensus estimate on all occasions, the average beat being 505.84%.

Let’s take a look at how things have shaped up prior to this announcement.

Factors at Play

Since the beginning of 2021, Fulgent Genetics has been witnessing strong recovery of its core NGS business. Demand for its NGS products has started to generate significant momentum with strong execution from LAP3 operations to sales organization.

In the first quarter, NGS volume grew 185% year over year on strong momentum in core genetic testing business. This growth was driven by the clients gradually returning to a more normal run rate, continued traction in biopharma business and the company’s new strategic partnerships with commercial organization. With the number of new COVID-19 cases decreasing, and office, travel, and events resuming, this momentum is expected to have continued in the second quarter.

FULGENT GENETIC Price and EPS Surprise

Test launches in new diseases are expected to have contributed strongly to the company’s Q2 revenues. The second-quarter results are likely to reflect growth outside the traditional pediatric rare disease menu in areas like adult neurogenetics, hereditary cancer, hereditary cardiovascular genetics, reproductive health and sequencing as a service.

In terms of COVID-19 testing business, in the first quarter, the company’s RT-PCR-based testing for COVID-19 continued to drive sustainable testing volume and the cash flow for its business. However, with COVID-19 case count falling through the months of the second quarter, the demand for COVID-19 RT-PCR test might have dropped in this period, aligning with the industry-wide trend.

However, in the first quarter, the company was awarded a monumental new contract with the CDC for COVID-19 genomic studies to track and identify new variants. It was awarded with up to $47 million in CDC funding to support the national COVID-19 surveillance program for SARS-CoV-2. This is likely to have strongly contributed to second-quarter top-line growth.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter 2021 revenues is pegged at $194.6 million, suggesting a stupendous surge over the year-ago reported figure of $17.27 million.

The Zacks Consensus Estimate for the company’s second-quarter 2021 earnings per share of $2.57 indicates a significant increase from the year-ago adjusted earnings of 17 cents a share.

What Our Model Suggests

Per our proven model, a stock with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates. This is however not the case as you can see below.

Earnings ESP: Fulgent Genetics 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.

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

Stocks Worth a Look

Here are a few medical stocks worth considering, as these too have the right combination of elements to beat on earnings this reporting cycle.

Globus Medical, Inc. (GMED - Free Report) has an Earnings ESP of +2.51% and a Zacks Rank #2, currently. The stock is slated to release second-quarter 2021 results on Aug 4.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Illumina, Inc. (ILMN - Free Report) has an Earnings ESP of +2.36% and a Zacks Rank of 2, at present. The stock is slated to release second-quarter 2021 results on Aug 5.

Nevro Corp. (NVRO - Free Report) has an Earnings ESP of +22.12% and is a Zacks #3 Ranked stock. The company is slated to release its second-quarter 2021 results on Aug 4.