WellCare Health's (WCG) Q2 Earnings: What's In Store?
Zacks Investment Research | Jul 25, 2019 11:23PM ET
WellCare Health Plans, Inc.'s (NYSE:WCG) is scheduled to release second-quarter 2019 results on Jul 30. In the last reported quarter, the company delivered a positive earnings surprise of 19%, primarily backed by the Meridian buyout and organic growth. Moreover, the bottom line surged 49.4% year over year.
The company flaunts an impressive surprise history, having delivered an earnings beat in all the trailing four quarters, the average being 13.52%.
What to Expect for Q2 Earnings
The company’s second-quarter earnings will likely gain from higher membership, leading to revenue growth. The Zacks Consensus Estimate for the metric is pegged at $4.10, up 11.1% from the year-ago reported number.
The Zacks Consensus Estimate for second-quarter total revenues stands at $6.6 billion, indicating a 42.4% surge from the year-earlier reported figure.
On the back of the company's consistent efforts to expand, its membership is likely to shoot up in the to-be-reported quarter. The Zacks Consensus Estimate for the company’s total Medicaid membership stands at 4.1 billion, suggesting a 46.6% improvement from the prior-year reported figure.
WellCare is likely to have witnessed growth in Medicaid premium revenues on the back of its strategic moves in the quarter to be reported.
The Zacks Consensus Estimate for second-quarter Medicare Advantage membership is pegged at 571 million, up 12% from the year-ago reported number. This upside is likely to be boosted by organic growth.
The Zacks Consensus Estimate for the company’s second-quarter total membership is pinned at 6.3 billion, implying a 44.6% jump from the prior-year quarter's reported figure.
However, WellCare Health is likely to suffer high debt levels due to growth-related investments, which heighten its financial risk. Interest expenses of the company might also persist to be steep in the upcoming quarterly results.
In the to-be-reported quarter, the company could possibly face elevated expenses due to higher medical and pharmacy costs; selling, general and administrative (SG&A) expenses as well as operating costs.
What the Quantitative Model States
Our proven model conclusively shows that WellCare Health is likely to beat on earnings this to-be-reported quarter. This is because the stock needs to have the right combination of a positive Original post
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