A month has gone by since the last earnings report for Envista (NVST Quick QuoteNVST - Free Report) . Shares have lost about 4.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Envista due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Envista Q1 Earnings Miss Estimates, Margins Down

Envista reported adjusted earnings per share of 26 cents in first-quarter 2024, down 31.6% year over year. The bottom line missed the Zacks Consensus Estimate by 16.1%.

The adjustments include charges and benefits related to the amortization of acquired intangible assets, restructuring costs and asset impairment, among others.

The company’s GAAP earnings per share was 14 cents in the quarter compared with the year-ago quarter’s figure of 25 cents.

Revenues in Detail

Revenues totaled $623.6 million in the reported quarter, down 0.6% year over year. The metric missed the Zacks Consensus Estimate by 0.9%.

Segments in Detail

In the first quarter, Speciality Products & Technologies totaled $408.7 million, down 0.3%.

Revenues in the Equipment & Consumables segment dropped 1.1% year over year to $214.9 million in the quarter under review.

Operational Update

Gross profit in the reported quarter fell 1.8% year over year to $356.3 million. Gross margin contracted 69 basis points (bps) to 57.1%.

Selling, general and administrative expenses were up 7.1% year over year to $284.9 million. Research and development expenses fell 4.9% year over year to $23.3 million.

Operating profit of $48.1 million fell 33.3% year over year. The operating margin contracted 378 bps to 7.7%.

Financial Update

Envista ended first-quarter 2024 with cash and cash equivalents of $948.5 million compared with $940 million at the end of fourth-quarter 2023.  Long-term debt in the first quarter declined to $1,390.5 million from $1,398.1 million at the end of the fourth quarter.

Net cash provided by operating activities at the end of the reported quarter was $40.3 million, surging from $3.1 million a year ago.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -13.21% due to these changes.

VGM Scores

At this time, Envista has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Envista has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Envista is part of the Zacks Medical - Products industry. Over the past month, Boston Scientific (BSX Quick QuoteBSX - Free Report) , a stock from the same industry, has gained 4.1%. The company reported its results for the quarter ended March 2024 more than a month ago.

Boston Scientific reported revenues of $3.86 billion in the last reported quarter, representing a year-over-year change of +13.8%. EPS of $0.56 for the same period compares with $0.47 a year ago.

For the current quarter, Boston Scientific is expected to post earnings of $0.58 per share, indicating a change of +9.4% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Boston Scientific. Also, the stock has a VGM Score of D.