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What's in Store for Fulgent Genetics (FLGT) Q4 Earnings?

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Fulgent Genetics, Inc. (FLGT - Free Report) is expected to release fourth-quarter 2019 results on Feb 27, after the closing bell. In the last reported quarter, the company delivered a positive earnings surprise of 250%. Further, it has a trailing four-quarter positive surprise of 75%, on average.

Q4 Estimates

Currently, the Zacks Consensus Estimate for fourth-quarter 2019 revenues is pegged at $9 million, suggesting growth of 58.8% from the year-ago reported figure. The consensus mark for earnings is pegged at 6 cents per share, indicating a whopping improvement of 700% from the year-ago reported figure.

Factors at Play

Strength across its business and elevated test volumes is likely to have driven Fulgent Genetics’ fourth-quarter performance.

FULGENT GENETIC Price and EPS Surprise


FULGENT GENETIC Price and EPS Surprise

FULGENT GENETIC price-eps-surprise | FULGENT GENETIC Quote

With respect to critical core business, the company is likely to have experienced solid demand for both its oncology test and reproductive health business. When it comes to oncology, there has been a consistent rise in demand for hereditary cancer panels. Moreover, rapid turnaround time and competitive pricing have been fueling notable growth in volume, thereby positioning oncology to become growing part of the company’s revenue sector. Consequently, this trend is likely to get reflected in Fulgent Genetics’ fourth-quarter performance.

With regard to genetic testing offering and tests, the company introduced Picture Genetics – a new line of at-home genetic testing offerings for the everyday consumer during the third quarter of 2019. This will offer enhanced genetic testing results to consumers directly and help them to make an informed decision about their health.

In the third quarter, the company unveiled a new test for reproductive health, which is now available for consumers. The launch of PGT-A test enables a woman to do the IVF process and to have greater control over embryo selections and the transfer, thereby increasing the probability of a healthy pregnancy. Another test that deserves a mention is Fulgent Genetics’ Parenting and the Wellness tests that are currently available online.

These tests have been driving the company’s growth along with expanding test offerings. These, in turn, are likely to have significantly contributed to the fourth-quarter top-line. In fact, per management, fourth-quarter 2019 revenues are projected to be around $8 million, reflecting a year-over-year growth of about 50%.

The company has been witnessing ongoing improvements in cost per test that continues to gain from operational efficiencies, thereby improving gross margin.

However, the company might have experienced higher operating expenses that are likely to have weighed on the company’s overall fourth-quarter performance.

What Our Quantitative Model Suggests

Per our proven model, a 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. This is not the case here as you will see.

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: Fulgent Genetics carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.

Stocks Worth a Look

Here are a few medical stocks worth considering with the right combination of elements to beat on earnings this reporting cycle.

Baxter International Inc. BAX has a Zacks Rank #3 and an Earnings ESP of +0.19%.

HealthEquity, Inc. HQY has a Zacks Rank of #3 and an Earnings ESP of +27.27%.

Nevro Corp. NVRO is Zacks #2 Ranked and has an Earnings ESP of +3.45%.

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