Medical Product Q1 Earnings Due On May 9: XRAY, HSIC & More

It is so far so good for the first-quarter reporting cycle, which is in its tail end with financial results from 412 members in the S&P 500 cohort. For Medical, one of the 16 broader Zacks sectors, we have results from 88.6% of the total market cap. Per the latest Earnings Preview, this sector has demonstrated a bullish trend with earnings and revenue beats standing at impressive levels of 86.0% and 69.8%, respectively.

Road Ahead for Medical Product Space

Medical product, an important part of the medical device subcategory within the broader Medical sector, looks promising at the moment. Investors are bullish as the Zacks categorized Medical - Products industry registered growth of 8.27% in the last three months, comfortably outperforming the S&P 500 Index’s gain of 4.95%.

Notably, the growth story in the space exclusively pertains to market dynamics and the shift in consumer demand, courtesy of the growing prevalence of minimally invasive surgeries, liquid biopsy tests, and use of IT for ensuring quick and improved patient care among other things. Furthermore, cost-effective products and techniques targeting emerging markets raise optimism.

On the flipside, the recent political conundrum in the healthcare space pertaining to ‘Trumpcare’ is a headwind. Amid such unpredictability, let us take a look at how the players of this industry are positioned this earnings season.

Let’s take a look at the major Medical products’ stocks expected to release first-quarter 2017 reports on May 9:

DENTSPLY Sirona Inc. (NASDAQ:XRAY) : This global manufacturer of professional dental products and technologies is scheduled to report results before the opening bell.

However, our proven model does not conclusively show that DENTSPLY Sirona is likely to beat on earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.

Currently, DENTSPLY Sirona has a Zacks Rank #2 (Buy) and an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate currently stand at 70 cents. On average, the company delivered a positive earnings surprise of 5.41% for the trailing four quarters. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Though a favorable Zacks Rank increases the predictive power of ESP, we need a positive ESP to be confident about an earnings beat. (Read More: Can DENTSPLY Pull a Surprise this Earnings Season?)

Henry Schein, Inc. (NASDAQ:HSIC) : This leading worldwide distributor of health care products and services is expected to come up with sluggish dental sales that will impact top line in the quarter to be reported. Year-over-year deterioration in gross and operating margin due to higher cost of sales and expenses is another matter of concern.

While a Zacks Rank #2 increases the predictive power of the ESP, a 0.00% ESP makes surprise prediction uncertain. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.66. (Read more: Will Henry Schein Deliver a Surprise in Q1 Earnings?)

Penumbra, Inc. (NYSE:PEN) : Penumbra is an active player in the fast-growing interventional therapies space. The company’s products primarily cater to the unmet clinical needs in neuro and peripheral vascular markets. Meanwhile, consistent growth in neuro franchise is driven by expansion in the ischemic stroke market as well as sales of Penumbra System. Accordingly, Penumbra’s strategy to focus on impactful product development across a varied portfolio may boost investors’ confidence in the stock.

This time, Penumbra is unlikely to come up with a beat as it currently has a Zacks Rank #3 and an Earnings ESP of 0.00%. Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 6 cents. (Read More: Can Penumbra Spring a Surprise this Earnings Season?)

Steris Plc (NYSE:STE) : Headquartered in Ohio, Steris develops, manufactures and markets infection prevention, decontamination, microbial reduction, and surgical and gastrointestinal support products and services. The company was originally known as STERIS Corporation.

Our proven model does not conclusively show an earnings beat for the company. Steris currently has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.94%. We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement.

Inogen Inc. (NASDAQ:INGN) is a provider of innovative respiratory products for use in the homecare setting. Inogen’s unique direct-to-customer business model, innovative product portfolio and growing patient base are currently drawing investor attention.

Our proven model does not conclusively show an earnings beat for Inogen which currently has a Zacks Rank #3 and an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 12 cents.

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