We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
What Lies Ahead for Stericycle (SRCL) this Earnings Season?
Read MoreHide Full Article
Waste management firm Stericycle, Inc. (SRCL - Free Report) is scheduled to report fourth-quarter 2016 results after the closing bell on Feb 15. In the last reported quarter, adjusted earnings comfortably exceeded the Zacks Consensus Estimate by 6 cents. The company has a mixed earnings surprise history with two beats and a miss in the trailing four quarters with an average positive surprise of 1.1%.
Let’s see how things are shaping up for this announcement.
Key Factors in the Quarter
During the to-be-reported quarter, Stericycle completed the acquisition of Shred-it International. The acquisition will strengthen Stericycle’s growth opportunities by providing additional business-to-business compliance solutions, leveraging its existing core capabilities, and expanding its foothold worldwide. This is likely to generate incremental revenues during the impending quarter.
However, the overall hazardous waste market remains a challenge for Stericycle as this has led to increased competition for available volume. Such market conditions have reduced revenues and profitability of the company’s manufacturing and industrial waste business. The company is also witnessing increased pricing pressure from its SQ (small quantity) customer base. This is a result of the consolidation of physician practices by hospitals and the overall healthcare cost pressures resulting from managed care.
High operating costs continue to be a headwind for Stericycle. In addition, a challenging macroeconomic environment and volatility in foreign exchange are affecting margins and the bottom line.
In addition, Stericycle operates in a highly competitive market. The barriers to entry into the regulated waste collection and disposal business and the pharmaceutical returns business are very low. Competitors also resort to aggressive pricing to gain market share. This erodes the profitability of the company and will likely lead to lower earnings in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Stericycle is likely to beat earnings this quarter as it does not possess the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Stericycle has a Zacks Rank #4 (Sell).
As it is we caution against stocks with a Zacks Rank #4 or #5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
STAG Industrial, Inc. (STAG - Free Report) has an Earnings ESP of +2.50% and a Zacks Rank #3.
CubeSmart (CUBE - Free Report) has an Earnings ESP of +2.70% and a Zacks Rank #3.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
What Lies Ahead for Stericycle (SRCL) this Earnings Season?
Waste management firm Stericycle, Inc. (SRCL - Free Report) is scheduled to report fourth-quarter 2016 results after the closing bell on Feb 15. In the last reported quarter, adjusted earnings comfortably exceeded the Zacks Consensus Estimate by 6 cents. The company has a mixed earnings surprise history with two beats and a miss in the trailing four quarters with an average positive surprise of 1.1%.
Let’s see how things are shaping up for this announcement.
Key Factors in the Quarter
During the to-be-reported quarter, Stericycle completed the acquisition of Shred-it International. The acquisition will strengthen Stericycle’s growth opportunities by providing additional business-to-business compliance solutions, leveraging its existing core capabilities, and expanding its foothold worldwide. This is likely to generate incremental revenues during the impending quarter.
However, the overall hazardous waste market remains a challenge for Stericycle as this has led to increased competition for available volume. Such market conditions have reduced revenues and profitability of the company’s manufacturing and industrial waste business. The company is also witnessing increased pricing pressure from its SQ (small quantity) customer base. This is a result of the consolidation of physician practices by hospitals and the overall healthcare cost pressures resulting from managed care.
High operating costs continue to be a headwind for Stericycle. In addition, a challenging macroeconomic environment and volatility in foreign exchange are affecting margins and the bottom line.
In addition, Stericycle operates in a highly competitive market. The barriers to entry into the regulated waste collection and disposal business and the pharmaceutical returns business are very low. Competitors also resort to aggressive pricing to gain market share. This erodes the profitability of the company and will likely lead to lower earnings in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Stericycle is likely to beat earnings this quarter as it does not possess the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stericycle, Inc. Price and EPS Surprise
Stericycle, Inc. Price and EPS Surprise | Stericycle, Inc. Quote
Zacks Rank: Stericycle has a Zacks Rank #4 (Sell).
As it is we caution against stocks with a Zacks Rank #4 or #5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Chesapeake Lodging Trust has an Earnings ESP of + 2.17% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
STAG Industrial, Inc. (STAG - Free Report) has an Earnings ESP of +2.50% and a Zacks Rank #3.
CubeSmart (CUBE - Free Report) has an Earnings ESP of +2.70% and a Zacks Rank #3.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>