Back to top

Image: Bigstock

Revvity (PKI) to Report Q1 Earnings: Is a Beat in the Cards?

Read MoreHide Full Article

Revvity, Inc. is slated to report first-quarter 2023 results on May 11, before market open. In the last reported quarter, the company delivered an earnings surprise of 2.41%. PKI’s earnings beat estimates in each of the trailing four quarters, the average surprise being 8.65%.

Q1 Estimates

The Zacks Consensus Estimate for revenues is pegged at $686.3 million, indicating a decline of 45.5% from the year-ago reported figure. The same for earnings stands at 99 cents per share, indicating a deterioration of 58.9% from that recorded in the prior-year quarter.

Company Name Change

In a SEC filing last month, the company announced that its shareholders have approved a proposal to change the name from PerkinElmer, Inc. to Revvity, Inc. The company changed its name to Revvity with effect from Apr 26.

The change in the company’s name followed the completion of divesture of its Applied, Food and Enterprise Services ("AES") business to an investment firm, New Mountain Capital, in March. The divestment deal was signed in 2022 for up to $2.45 billion in total consideration.

The AES business was part of Discovery & Analytical Solutions segment that generated more than 28% of total combined revenues for PKI in 2022. Following the divestment, the company now consists of the high-growth Life Sciences and Diagnostics business.

Lower COVID-19 contributions, as well as loss of sales from divested AES business, are likely to have adversely impacted the company’s top and bottom-line performance in the soon-to-be-reported quarter.

Lower COVID Revenues Likely to Hurt Diagnostics

Revvity’s Diagnostics business is expected to have continued its declining trend in the same quarter. Sales of this segment declined 31% in the last reported quarter, primarily due to a fall in demand for COVID-related products. However, this was partially offset by strong demand for non-COVID products in the soon-to-be-reported quarter.

The removal of COVID-19 restrictions in China is likely to have boosted the continued demand for PKI’s immunodiagnostics business. This, in turn, might have partially offset loss of sales from COVID-related products.

Another Revenue Driver

In the fourth quarter of 2022, Discovery & Analytical Solutions business, excluding AES business, grew 9.1%. This was mainly due to continued demand for Revvity’s preclinical discovery business and strength in its informatics franchise. This trend is likely to have continued in the quarter to be reported.

Meanwhile, continued supply chain challenges and inflationary pressures in some countries are expected to have fueled material costs, thereby hurting margins. However, productivity initiatives, improved pricing and strict cost control measures are likely to have benefited PKI’s first-quarter gross and operating margins. New product introductions might have improved product mix and, thereby, gross margin.

Other Factors to Consider

In February, Revvity launched the EnVision Nexus system — the fastest and most sensitive multimode plate reader to date. The system is designed for demanding high-throughput screening applications and accelerating drug discovery efforts. The launch is expected to have significantly strengthened Revvity’s Life Sciences business unit in the to-be-reported quarter.

Earnings Beat Likely

Our proven model predicts an earnings beat for Revvity this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is the case here as you will see below. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (99 cents per share) and the Zacks Consensus Estimate ($1.01 per share), is +1.66% for Revvity.

Zacks Rank: Revvity currently carries a Zacks Rank #3.

Other Stocks Worth a Look

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

Ikena Oncology, Inc. (IKNA - Free Report) has an Earnings ESP of +10.38% and a Zacks Rank of 2. IKNA has an estimated growth rate of 13.2% for 2023. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ikena Oncology’s projected sales growth of 63.5% compares favorably with the industry’s 2.3%.

Invivyd, Inc. (IVVD - Free Report) has an Earnings ESP of +13.86% and is a Zacks #2 Rank stock. IVVD has an estimated growth rate of 39.9% for 2023.

Invivyd’s P/B ratio of 0.4 compares favorably with the industry’s 1.8.

Surrozen, Inc. (SRZN - Free Report) has an Earnings ESP of +13.86% and carries a Zacks Rank of 2 at present. SRZN has an estimated long-term growth rate of 38.4%.

Surrozen’searnings surpassed estimates in all the trailing four quarters, with the average surprise being 43.9%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Ikena Oncology, Inc. (IKNA) - free report >>

Surrozen, Inc. (SRZN) - free report >>

Invivyd, Inc. (IVVD) - free report >>

Published in