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How to Play Henry Schein (HSIC) Ahead of Q2 Earnings?
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Henry Schein, Inc. (HSIC - Free Report) is expected to release second-quarter 2024 results on Aug 6 before the opening bell.
The company posted adjusted earnings per share (EPS) of $1.10 in the last reported quarter, which exceeded the Zacks Consensus Estimate by 11.11%. In the trailing four quarters, Henry Schein’s earnings matched estimates once, surpassed twice and missed in one quarter. The average negative surprise is 2.55%.
Q2 Estimates
The Zacks Consensus Estimate for HSIC’s second-quarter 2024 revenues is pegged at $3.28 billion. This suggests an increase of 5.9% from the year-ago reported figure.
The Zacks Consensus Estimate for its second-quarter 2024 EPS stands at $1.27, which indicates a year-over-year fall of 3.1%.
Estimate Revision Trend Ahead of Q2 Earnings
Estimates for Henry Schein’s Q2 earnings have remained unchanged at $1.27 per share in the past 30 days.
Let’s examine the healthcare product and service distributor’s developments leading up to this announcement.
Factors at Play
Health care Distribution
The company is expected to sustain the strong recovery momentum from last year’s cybersecurity incident, which mainly affected the dental and medical distribution businesses in North America and Europe. There may have been a steady improvement in dental merchandise sales, including in most international markets, aiding the overall revenues in the second quarter of 2024.
Dental equipment sales are also likely to have increased in North America. In addition, Henry Schein’s THRIVE Signature program may have contributed to the overall sales growth, driven by an increase in memberships.
HSIC is likely to have advanced with the BOLD+1 strategic priorities in the to-be-reported quarter. Notable acquisitions made last year, such as S.I.N. Implant System, Shield Healthcare as well as a partnership with Biotech Dental, may have positively contributed to its profitability. We expect Henry Schein’s global dental specialties business to expand through acquisitions and organic market share gains, as well as by robust growth across oral surgical, endodontic and orthodontic products.
Sales of North American implants are likely to have been stable, while international sales under the BioHorizons Camlog brand may have been particularly strong in Germany due to the introduction of the Easy 2.0 value implant system. Additionally, the new Edge branded products launched through the Henry Schein U.S. distribution business may have helped achieve impressive sales growth in the second quarter.
In the orthodontics wing, we expect a favorable performance of the new Motion Probe Bracket System, helping to particularly address the preferences for motion products identified last year. Other product introductions, including an advanced clear aligner system, new additions to the Motion portfolio as well as the NemoStudio software suite, are likely to have made a positive impact on the company’s revenues in the to-be-reported quarter.
In the Medical business, point-of-care diagnostics sales may have given a solid contribution to top-line growth. Both the North American Rescue and Home Solutions businesses are also likely to have performed well during the second quarter.
In April, Henry Schein expanded into the high-growth extremities market with the strategic acquisition of TriMed. The addition is likely to have enhanced the company’s strong ties with IDNs (Integrated Delivery Networks) and ASCs (Ambulatory Surgery Centers) by providing a broader range of surgical solutions, thereby boosting revenues as well.
Our model projects the segment’s revenues to improve 5.2% year over year in the second quarter of 2024.
Technology and Value-Added Services
Similar to the past several quarters, the segment may have continued to be driven by its largest component, Henry Schein One. The customer base for the Dentrix Ascend and Dentally cloud-based solutions is likely to have increased further, having registered 36% year-over-year growth in the first quarter. On the last earnings call held in May, management expressed that their effective handling of the Change Healthcare cyber incident has helped bring in more customers to the company. We assume technology sales may have gradually returned to more normalized growth levels in the to-be-reported quarter.
Additionally, the revenue cycle management e-claims business is likely to have delivered a strong performance. In April, Henry Schein One announced two new tools to enhance dental practice performance — an integration with Reserve with Google for healthcare and the launch of its Appointment Capacity Report, powered by Jarvis Analytics. These solutions are expected to contribute favorably to revenues in the second quarter.
Our model projects HSIC’s global Technology and value-added services revenues to improve by 8.3% compared to last year’s comparable period.
However, lower sales of PPE products and COVID-19 test kits may have hurt Henry Schein’s internally generated local currency sales in the second quarter. We also expect the residual impacts of the cyber incident to weigh on the company’s operational results and lead to incurring substantial expenses. Given the current macroeconomic conditions across the globe, it may have also struggled to curb its cost of revenues and operating expenses. Consequently, these are likely to have adversely weighed on HSIC’s bottom line in the quarter under review.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates, which is not the case here.
Earnings ESP: Henry Schein has an Earnings ESP of -2.80%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this quarter:
HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 79.17%. The Zacks Consensus Estimate for the company’s second-quarter EPS is expected to surge 266.7% from the year-ago quarter figure.
QIAGEN (QGEN - Free Report) has an Earnings ESP of +2.25% and a Zacks Rank #2. The company is slated to release results for the second quarter of 2024 on Jul 31.
QGEN’s earnings surpassed estimates in three of the trailing four quarters, with the average surprise being 1.70%. The Zacks Consensus Estimate for the company’s second-quarter EPS is expected to fall by 1.9% from the year-ago quarter figure.
Penumbra (PEN - Free Report) has an Earnings ESP of +0.08% and a Zacks Rank #2. The company is scheduled to release results for the second quarter of 2024 on Jul 30.
The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, with the average surprise being 25.97%. The Zacks Consensus Estimate for PEN’s 2024 second-quarter EPS is expected to improve 30.2% from the year-ago reported figure.
Image: Bigstock
How to Play Henry Schein (HSIC) Ahead of Q2 Earnings?
Henry Schein, Inc. (HSIC - Free Report) is expected to release second-quarter 2024 results on Aug 6 before the opening bell.
The company posted adjusted earnings per share (EPS) of $1.10 in the last reported quarter, which exceeded the Zacks Consensus Estimate by 11.11%. In the trailing four quarters, Henry Schein’s earnings matched estimates once, surpassed twice and missed in one quarter. The average negative surprise is 2.55%.
Q2 Estimates
The Zacks Consensus Estimate for HSIC’s second-quarter 2024 revenues is pegged at $3.28 billion. This suggests an increase of 5.9% from the year-ago reported figure.
The Zacks Consensus Estimate for its second-quarter 2024 EPS stands at $1.27, which indicates a year-over-year fall of 3.1%.
Estimate Revision Trend Ahead of Q2 Earnings
Estimates for Henry Schein’s Q2 earnings have remained unchanged at $1.27 per share in the past 30 days.
Let’s examine the healthcare product and service distributor’s developments leading up to this announcement.
Factors at Play
Health care Distribution
The company is expected to sustain the strong recovery momentum from last year’s cybersecurity incident, which mainly affected the dental and medical distribution businesses in North America and Europe. There may have been a steady improvement in dental merchandise sales, including in most international markets, aiding the overall revenues in the second quarter of 2024.
Dental equipment sales are also likely to have increased in North America. In addition, Henry Schein’s THRIVE Signature program may have contributed to the overall sales growth, driven by an increase in memberships.
HSIC is likely to have advanced with the BOLD+1 strategic priorities in the to-be-reported quarter. Notable acquisitions made last year, such as S.I.N. Implant System, Shield Healthcare as well as a partnership with Biotech Dental, may have positively contributed to its profitability. We expect Henry Schein’s global dental specialties business to expand through acquisitions and organic market share gains, as well as by robust growth across oral surgical, endodontic and orthodontic products.
Henry Schein, Inc. Price and EPS Surprise
Henry Schein, Inc. price-eps-surprise | Henry Schein, Inc. Quote
Sales of North American implants are likely to have been stable, while international sales under the BioHorizons Camlog brand may have been particularly strong in Germany due to the introduction of the Easy 2.0 value implant system. Additionally, the new Edge branded products launched through the Henry Schein U.S. distribution business may have helped achieve impressive sales growth in the second quarter.
In the orthodontics wing, we expect a favorable performance of the new Motion Probe Bracket System, helping to particularly address the preferences for motion products identified last year. Other product introductions, including an advanced clear aligner system, new additions to the Motion portfolio as well as the NemoStudio software suite, are likely to have made a positive impact on the company’s revenues in the to-be-reported quarter.
In the Medical business, point-of-care diagnostics sales may have given a solid contribution to top-line growth. Both the North American Rescue and Home Solutions businesses are also likely to have performed well during the second quarter.
In April, Henry Schein expanded into the high-growth extremities market with the strategic acquisition of TriMed. The addition is likely to have enhanced the company’s strong ties with IDNs (Integrated Delivery Networks) and ASCs (Ambulatory Surgery Centers) by providing a broader range of surgical solutions, thereby boosting revenues as well.
Our model projects the segment’s revenues to improve 5.2% year over year in the second quarter of 2024.
Technology and Value-Added Services
Similar to the past several quarters, the segment may have continued to be driven by its largest component, Henry Schein One. The customer base for the Dentrix Ascend and Dentally cloud-based solutions is likely to have increased further, having registered 36% year-over-year growth in the first quarter. On the last earnings call held in May, management expressed that their effective handling of the Change Healthcare cyber incident has helped bring in more customers to the company. We assume technology sales may have gradually returned to more normalized growth levels in the to-be-reported quarter.
Additionally, the revenue cycle management e-claims business is likely to have delivered a strong performance. In April, Henry Schein One announced two new tools to enhance dental practice performance — an integration with Reserve with Google for healthcare and the launch of its Appointment Capacity Report, powered by Jarvis Analytics. These solutions are expected to contribute favorably to revenues in the second quarter.
Our model projects HSIC’s global Technology and value-added services revenues to improve by 8.3% compared to last year’s comparable period.
However, lower sales of PPE products and COVID-19 test kits may have hurt Henry Schein’s internally generated local currency sales in the second quarter. We also expect the residual impacts of the cyber incident to weigh on the company’s operational results and lead to incurring substantial expenses. Given the current macroeconomic conditions across the globe, it may have also struggled to curb its cost of revenues and operating expenses. Consequently, these are likely to have adversely weighed on HSIC’s bottom line in the quarter under review.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates, which is not the case here.
Earnings ESP: Henry Schein has an Earnings ESP of -2.80%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this quarter:
Hims & Hers Health (HIMS - Free Report) has an Earnings ESP of +19.28% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.The company is scheduled to release results for the second quarter of 2024 on Aug 5.
HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 79.17%. The Zacks Consensus Estimate for the company’s second-quarter EPS is expected to surge 266.7% from the year-ago quarter figure.
QIAGEN (QGEN - Free Report) has an Earnings ESP of +2.25% and a Zacks Rank #2. The company is slated to release results for the second quarter of 2024 on Jul 31.
QGEN’s earnings surpassed estimates in three of the trailing four quarters, with the average surprise being 1.70%. The Zacks Consensus Estimate for the company’s second-quarter EPS is expected to fall by 1.9% from the year-ago quarter figure.
Penumbra (PEN - Free Report) has an Earnings ESP of +0.08% and a Zacks Rank #2. The company is scheduled to release results for the second quarter of 2024 on Jul 30.
The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, with the average surprise being 25.97%. The Zacks Consensus Estimate for PEN’s 2024 second-quarter EPS is expected to improve 30.2% from the year-ago reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.