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What's in Store for AngioDynamics (ANGO) in Q1 Earnings?

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AngioDynamics Inc. (ANGO - Free Report) is set to report first-quarter fiscal 2019 results on Sep 27, before market open.

The company is expected to benefit from expanding product portfolio, international market expansion and cost-saving initiatives. These factors indicate considerable growth opportunities in the long run. However, softness in the Venous Insufficiency business and PICC product lines is a concern.

In the last reported quarter, the company reported adjusted earnings of 20 cents per share, which missed the Zacks Consensus Estimate by a penny. Earnings improved 5.3% year over year. Net sales came in at $88.3 million, marginally missing the Zacks Consensus Estimate of $89 million. However, sales improved 1.6% from the prior-year quarter’s figure.

The company delivered an average negative earnings surprise of 2.66% in the trailing four quarters.

Let’s see how things are shaping up prior to this announcement.

How are the Estimates Treading?

For the quarter to be reported, the Zacks Consensus Estimate for earnings is pegged at 18 cents, reflecting a rise of 50% year over year.

Further, the Zacks Consensus Estimate for sales is pinned at $83.4 million, showing a decline of 2.4% year over year

AngioDynamics, Inc. Price and EPS Surprise

 

AngioDynamics, Inc. Price and EPS Surprise | AngioDynamics, Inc. Quote

 

Factors to Drive Q1 Results

NanoKnife is one of the major products, which will drive the Oncology business in the first quarter.

In the last reported quarter, the platform was a major contributor to revenues and witnessed mid-teen growth in sales on a year-over-year basis.

The product has previously received FDA clearance for the surgical ablation of the soft tissue. The system utilizes low-energy direct current electrical pulses to permanently open pores in target cell membranes.

In Jan 2018, the NanoKnife System was granted Expedited Access Pathway (EAP) designation by the FDA. It was proposed that the upgraded system will be used for the treatment of Stage III pancreatic cancer.

Recently, the company announced the acquisition of BioSentry Tract Sealant System (BioSentry) technology from Surgical Specialties, LLC. Notably, the system will be integrated into the company’s core Oncology business. A 12-person commercial organization of Surgical Specialties will join AngioDynamics to expand the reach of the Oncology business. However, management expects the acquisition to be neutral to earnings in fiscal 2019.

What’s Deterring AngioDynamics?

AngioDynamics’ Venous Insufficiency business has been sluggish as its largest customer discontinued the exclusive use of EVLT (Endovenous Laser System) products.

Consequently, the company’s core Peripheral Vascular business is likely to be sluggish. Recently, the company renamed the Peripheral Vascular business to Vascular Interventions.

What Our Model Predicts?

Our quantitative model does not show earnings beat for AngioDynamics in this quarter. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. This is not the case here, as you will see below.

Earnings ESP:AngioDynamics currently has an Earnings ESP of -8.57%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank:AngioDynamics currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, a negative ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 and 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

Here are some companies you may want to consider as our model shows that they have the right combination of elements to post earnings beat this quarter.

Wright Medical Group N.V. (WMGI - Free Report) has an Earnings ESP of +3.59% and a Zacks Rank #3.

Stryker Corporation (SYK - Free Report) has an Earnings ESP of +0.05% and a Zacks Rank #3.

Insulet Corporation (PODD - Free Report) has an Earnings ESP of +16.13% and a Zacks Rank #3.

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