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Will These 4 MedTech Stocks Beat Forecasts This Earnings Season?
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The second-quarter 2024 earnings season has just begun for the Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry classification), with several MedTech players ready to release their quarterly results.
Per the latest Earnings Trends, the Medical sector is likely to register margin gains for the fourth consecutive quarter. It is also among the 10 sectors whose net margins are estimated to have improved during the second quarter. Growing demand across all industries and improved pricing are likely to result in strong product revenue growth, offsetting the shortcomings generated by worldwide geopolitical issues and healthcare labor shortages.
The latest Earnings Trends indicates that 16.9% of the companies in the Medical sector, constituting nearly 33.8% of the sector’s market capitalization, reported earnings until Jul 24. All reported companies beat on their respective earnings and revenues. Earnings increased 4.2% year over year on the back of 2.6% higher revenues.
Overall, second-quarter earnings of the Medical sector are expected to improve 19.4% on the back of a 7.3% increase in sales. This compares with a first-quarter earnings decline of 24% despite a 6.8% reported revenue growth. Per the latest trends, the Medical sector is one of the nine sectors whose second-quarter earnings are expected to be above the year-earlier level.
Medical Device Quarterly Synopsis
Despite the ongoing macroeconomic challenges, both in the United States and globally, the Medical Device or Zacks-defined Medical Products appears to be stable. With the pandemic crisis now behind us, there has been an increase in care visits, boosting the demand for therapies and other healthcare services.
Additionally, the rapid adoption of generative Artificial Intelligence (genAI) and digital therapies is enhancing the efficiency and patient-friendliness of services. Innovation and investment in this field are being driven by an aging population, greater healthcare awareness and improved access to better health options. Market experts expect these trends to significantly influence the quarterly results.
The industry is currently grappling with challenges stemming from a deteriorating geopolitical climate. This is further compounded by global supply-chain disruptions, leading to increased costs for labor, raw materials and freight, as well as a shortage of healthcare workers. Additionally, diagnostic testing companies are experiencing a consistent year-over-year decline in demand for COVID-19 testing products.
Overall, the April-June months were marked by strength in product portfolios and solid customer adoption of products. Medical Device companies like Cencora (COR - Free Report) , DENTSPLY SIRONA (XRAY - Free Report) , GE HealthCare Technologies (GEHC - Free Report) and Glaukos (GKOS - Free Report) are likely to have been positively impacted by these tailwinds, despite encountering turbulence on the macroeconomic front.
Let’s look at the status of these four MedTechplayers that are scheduled to announce their quarterly results on Jul 31.
Cencora: COR’s third-quarter fiscal 2024 performance might have been favored by sustained strong growth in specialty product sales, coupled with broad-based solid performance and utilization trends across the portfolio in the U.S. Healthcare Solutions segment. The performance is also likely to have been complemented by strong growth in Europe and Canada. However, lower sales of commercial COVID-19 treatments are likely to have partially offset the growth factors. (Read more: Cencora to Report Q3 Earnings: Is a Beat in Store?)
The Zacks Consensus Estimate for third-quarter 2024 earnings per share (EPS) is pegged at $3.18. The consensus mark for revenues is pinned at $73.58 billion.
Our proven model predicts an earnings beat for Cencora this time around. The 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.
Cencora has an Earnings ESP of +1.01% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
DENTSPLY SIRONA: XRAY’s Orthodontic and Implant Solutions segment witnessed organic revenue growth in the last reported quarter on the back of strong demand for SureSmile, which continues to benefit from market share gains and new product offerings. Per management, the company is likely to expand further in certain international markets, including Japan and Brazil. This will probably lead to the continued momentum of SureSmile.
The company expects SureSmile sales to grow more than 20% in 2024. The strong growth trend for the product is likely to be reflected in the quarterly results. (Read more: What's in Store for DENTSPLY SIRONA in Q2 Earnings?)
The Zacks Consensus Estimate for second-quarter EPS is pegged at 50 cents. The consensus mark for revenues is pinned at $995.4 million.
GE HealthCare: GEHC is expected to have been hurt by a lower volume of sales during the second quarter. However, consistent new product introductions (NPIs) and backlog fulfillment on the back of easing supply challenges are likely to have provided a cushion.
Further, improved pricing and successful commercial execution might have added to the top line. The growth is likely to have been primarily driven by the Pharmaceutical Diagnostics business, which might have witnessed strong organic revenue growth on the back of favorable prices, recovery of global elective procedures and stabilization of supply. However, a strong commercial performance in the second quarter might have been dented by a challenging macroeconomic environment and currency headwinds. (Read more: Lower Volume Likely to Hurt GE HealthCare's Q2 Earnings)
The Zacks Consensus Estimate for second-quarter 2024 EPS is pegged at 98 cents. The consensus mark for revenues is pinned at $4.89 billion.
GE HealthCare Technologies Inc. Price and EPS Surprise
GEHC has an Earnings ESP of -4.71% and a Zacks Rank #3.
Glaukos: The company's second-quarter results are likely to benefit from continued top-line growth in the past few quarters. GKOS’s glaucoma franchise is likely to have witnessed growth in revenues on the back of its iStent portfolio. Moreover, iDoseTR, which is currently in the initial phases of the controlled launch plan, should have generated additional revenues.
The company continues with its efforts to scale its international infrastructure and drive MIGS forward as a standard of care in each region. International revenues registered a 20% year-over-year improvement in the first quarter, a trend that is likely to have continued in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for second-quarter 2024 EPS is pegged at a loss of 52 cents per share. The consensus mark for revenues is pinned at $88.41 million.
Image: Bigstock
Will These 4 MedTech Stocks Beat Forecasts This Earnings Season?
The second-quarter 2024 earnings season has just begun for the Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry classification), with several MedTech players ready to release their quarterly results.
Per the latest Earnings Trends, the Medical sector is likely to register margin gains for the fourth consecutive quarter. It is also among the 10 sectors whose net margins are estimated to have improved during the second quarter. Growing demand across all industries and improved pricing are likely to result in strong product revenue growth, offsetting the shortcomings generated by worldwide geopolitical issues and healthcare labor shortages.
The latest Earnings Trends indicates that 16.9% of the companies in the Medical sector, constituting nearly 33.8% of the sector’s market capitalization, reported earnings until Jul 24. All reported companies beat on their respective earnings and revenues. Earnings increased 4.2% year over year on the back of 2.6% higher revenues.
Overall, second-quarter earnings of the Medical sector are expected to improve 19.4% on the back of a 7.3% increase in sales. This compares with a first-quarter earnings decline of 24% despite a 6.8% reported revenue growth. Per the latest trends, the Medical sector is one of the nine sectors whose second-quarter earnings are expected to be above the year-earlier level.
Medical Device Quarterly Synopsis
Despite the ongoing macroeconomic challenges, both in the United States and globally, the Medical Device or Zacks-defined Medical Products appears to be stable. With the pandemic crisis now behind us, there has been an increase in care visits, boosting the demand for therapies and other healthcare services.
Additionally, the rapid adoption of generative Artificial Intelligence (genAI) and digital therapies is enhancing the efficiency and patient-friendliness of services. Innovation and investment in this field are being driven by an aging population, greater healthcare awareness and improved access to better health options. Market experts expect these trends to significantly influence the quarterly results.
The industry is currently grappling with challenges stemming from a deteriorating geopolitical climate. This is further compounded by global supply-chain disruptions, leading to increased costs for labor, raw materials and freight, as well as a shortage of healthcare workers. Additionally, diagnostic testing companies are experiencing a consistent year-over-year decline in demand for COVID-19 testing products.
Overall, the April-June months were marked by strength in product portfolios and solid customer adoption of products. Medical Device companies like Cencora (COR - Free Report) , DENTSPLY SIRONA (XRAY - Free Report) , GE HealthCare Technologies (GEHC - Free Report) and Glaukos (GKOS - Free Report) are likely to have been positively impacted by these tailwinds, despite encountering turbulence on the macroeconomic front.
Let’s look at the status of these four MedTechplayers that are scheduled to announce their quarterly results on Jul 31.
Cencora: COR’s third-quarter fiscal 2024 performance might have been favored by sustained strong growth in specialty product sales, coupled with broad-based solid performance and utilization trends across the portfolio in the U.S. Healthcare Solutions segment. The performance is also likely to have been complemented by strong growth in Europe and Canada. However, lower sales of commercial COVID-19 treatments are likely to have partially offset the growth factors. (Read more: Cencora to Report Q3 Earnings: Is a Beat in Store?)
The Zacks Consensus Estimate for third-quarter 2024 earnings per share (EPS) is pegged at $3.18. The consensus mark for revenues is pinned at $73.58 billion.
Our proven model predicts an earnings beat for Cencora this time around. The 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.
Cencora, Inc. Price and EPS Surprise
Cencora, Inc. price-eps-surprise | Cencora, Inc. Quote
Cencora has an Earnings ESP of +1.01% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
DENTSPLY SIRONA: XRAY’s Orthodontic and Implant Solutions segment witnessed organic revenue growth in the last reported quarter on the back of strong demand for SureSmile, which continues to benefit from market share gains and new product offerings. Per management, the company is likely to expand further in certain international markets, including Japan and Brazil. This will probably lead to the continued momentum of SureSmile.
The company expects SureSmile sales to grow more than 20% in 2024. The strong growth trend for the product is likely to be reflected in the quarterly results. (Read more: What's in Store for DENTSPLY SIRONA in Q2 Earnings?)
The Zacks Consensus Estimate for second-quarter EPS is pegged at 50 cents. The consensus mark for revenues is pinned at $995.4 million.
DENTSPLY SIRONA Inc. Price and EPS Surprise
DENTSPLY SIRONA Inc. price-eps-surprise | DENTSPLY SIRONA Inc. Quote
XRAY has an Earnings ESP of -1.33% and a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
GE HealthCare: GEHC is expected to have been hurt by a lower volume of sales during the second quarter. However, consistent new product introductions (NPIs) and backlog fulfillment on the back of easing supply challenges are likely to have provided a cushion.
Further, improved pricing and successful commercial execution might have added to the top line. The growth is likely to have been primarily driven by the Pharmaceutical Diagnostics business, which might have witnessed strong organic revenue growth on the back of favorable prices, recovery of global elective procedures and stabilization of supply. However, a strong commercial performance in the second quarter might have been dented by a challenging macroeconomic environment and currency headwinds. (Read more: Lower Volume Likely to Hurt GE HealthCare's Q2 Earnings)
The Zacks Consensus Estimate for second-quarter 2024 EPS is pegged at 98 cents. The consensus mark for revenues is pinned at $4.89 billion.
GE HealthCare Technologies Inc. Price and EPS Surprise
GE HealthCare Technologies Inc. price-eps-surprise | GE HealthCare Technologies Inc. Quote
GEHC has an Earnings ESP of -4.71% and a Zacks Rank #3.
Glaukos: The company's second-quarter results are likely to benefit from continued top-line growth in the past few quarters. GKOS’s glaucoma franchise is likely to have witnessed growth in revenues on the back of its iStent portfolio. Moreover, iDoseTR, which is currently in the initial phases of the controlled launch plan, should have generated additional revenues.
The company continues with its efforts to scale its international infrastructure and drive MIGS forward as a standard of care in each region. International revenues registered a 20% year-over-year improvement in the first quarter, a trend that is likely to have continued in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for second-quarter 2024 EPS is pegged at a loss of 52 cents per share. The consensus mark for revenues is pinned at $88.41 million.
Glaukos Corporation Price and EPS Surprise
Glaukos Corporation price-eps-surprise | Glaukos Corporation Quote
GKOS has an Earnings ESP of -0.96% and a Zacks Rank #3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.