PBH Q2 Earnings Match Estimates, Revenues Beat, Shares Rise

Donald Trump’s win and the Fed’s second rate cut this year have brought back the lure for dividend investing. Trump's pro-growth policies are expected to drive inflation higher and dividend-paying stocks can serve as a hedge against inflation. Meanwhile, the Fed cut rates by 25 bps after a 50-bps cut in September. The lower rates have made dividend investing tempting.

While several dividend stocks could provide capital appreciation, zeroing in on stocks with a history of dividend growth leads to a healthy portfolio with a greater scope of capital appreciation as opposed to simple dividend-paying stocks or those with high yields. Further, dividend-paying securities are major sources of consistent income when returns from the equity market are at risk.

We have selected five dividend growth stocks — Greenbrier Companies Inc. GBX, Walmart Inc. WMT, Leidos Holdings Inc. LDOS, InterDigital, Inc. IDCC and ResMed Inc. RMD — that could be compelling picks.

Why Dividend Growth?

Stocks that have a strong history of dividend growth belong to mature companies, which are less susceptible to large swings in the market and act as a hedge against economic or political uncertainty as well as stock market volatility. At the same time, these offer downside protection with their consistent increase in payouts.

Additionally, these stocks have superior fundamentals that make them quality and promising investments for the long term. These include a sustainable business model, a long track of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics. Further, a history of strong dividend growth indicates that such increases are likely in the future.

Although these stocks do not necessarily have the highest yields, they have outperformed for a longer period than the broader stock market or any other dividend-paying stock.

As a result, picking dividend growth stocks appears as a winning strategy when some other parameters are also included.

5-Year Historical Dividend Growth greater than zero: This selects stocks with a solid dividend growth history.

5-Year Historical Sales Growth greater than zero: This represents stocks with a strong record of growing revenues.

5-Year Historical EPS Growth greater than zero: This represents stocks with a solid earnings growth history.

Next 3-5 Year EPS Growth Rate greater than zero: This represents the rate at which a company’s earnings are expected to grow. Improving earnings should help companies sustain dividend payments.

Price/Cash Flow less than M-Industry: A ratio less than M-industry indicates that the stock is undervalued in that industry and that an investor needs to pay less for better cash flow generated by the company.

52-Week Price Change greater than S&P 500 (Market Weight): This ensures that the stock appreciated more than the S&P 500 over the past year.

Top Zacks Rank: Stocks having a Zacks Rank #1 (Strong Buy) or 2 (Buy) generally outperform their peers in all types of market environments.

Growth Score of B or better: Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.

Just these few criteria narrowed down the universe from over 7,700 stocks to just 11.

Here are five of the 11 stocks that fit the bill:

Oregon-based Greenbrier is a leading supplier of transportation equipment and services to the railroad and related industries. The company saw a solid earnings estimate of 80 cents over the past 30 days for the fiscal year ending in August 2025 and has an estimated growth rate of 4.8%.

Greenbrier currently has a Zacks Rank #1 and a Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arkansas-based Walmart has evolved from being just a traditional brick-and-mortar retailer into an omnichannel player. It is engaged in the operation of retail, wholesale and other units worldwide. The company has an estimated earnings growth rate of 9.91% for the fiscal year ending January 2025 and delivered an average earnings surprise of 6.89% in the last four reported quarters.

Presently, WMT has a Zacks Rank #2 and a Growth Score of A.

Delaware-based Leidos Holdings is a global science and technology leader that serves the defense, intelligence, civil and health markets. It saw a solid earnings estimate of 50 cents over the past 30 days for this year and has an estimated earnings growth rate of 29.4%.

Leidos Holdings carries a Zacks Rank #1 and has a Growth Score of A.

Delaware-based InterDigital is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks. IDCC saw a negative earnings estimate of a penny over the past 30 days for this year. It has an estimated earnings growth rate of 12.2%

InterDigital has a Zacks Rank #1 and a Growth Score of A.

California-based ResMed holds a major position as a designer, manufacturer, as well as a distributor of generators, masks and related accessories for the treatment of sleep-disordered breathing and other respiratory disorders worldwide. The stock saw a positive earnings estimate revision of 20 cents over the past 30 days for the fiscal year (ending June 2025) and has an estimated earnings growth rate of 19.4%.

ResMed has a Zacks Rank #2 and a Growth Score of A.

You can get the remaining stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.

The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

Click here to sign up for a free trial to the Research Wizard today.

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.

Zacks Investment Research

Tandem Diabetes Care, Inc. TNDM posted a third-quarter 2024 loss of 36 cents per share compared with the year-ago quarter’s reported loss of 38 cents. The figure beat the Zacks Consensus Estimate of a loss of 43 cents per share.

On a GAAP basis, the loss was 35 cents per share compared with the year-ago loss of 51 cents.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Following the earnings announcement, TNDM stock fell 2% in aftermarket trading yesterday.

TNDM’s Q3 Revenues

GAAP revenues in the quarter totaled $244 million, up 31.5% year over year. The figure topped the Zacks Consensus Estimate by 9.2%.

Non-GAAP revenues amounted to $242.9 million, up 25.3% year over year.

From September 2022 through February 2024, the company offered the Tandem Choice Program to eligible t:slim X2 customers to provide a pathway to the ownership of its newest hardware platform, Tandem Mobi, when available. Based on that, Tandem Diabetes is now reporting adjusted revenues as well.

TNDM’s Quarterly Performance in Detail

Tandem Diabetes reports under two primary markets based on the geographic location to which its products are shipped.

The United States

Total sales in this region were $171.7 million on a GAAP basis, up 31.9% year over year. Non-GAAP sales in the United States totaled $170.6 million. The company shipped approximately 21,000 pumps in the third quarter.

Outside the United States

In the third quarter, the company registered GAAP sales of $72.3 million (same on a non-GAAP basis) compared with $53.4 million in the prior-year period.

Margins

The gross profit in the reported quarter was $124.6 million, up 38.9% year over year. The gross margin expanded 274 basis points (bps) to 51.1% despite a 24.5% rise in the cost of sales.

SG&A expenses rose 25.6% to $99.6 million. R&D expenses rose 21.9% to $51.1 million.

The company registered an adjusted operating loss of $26.1 million in the third quarter compared with a loss of $31.5 million in the year-ago period.

Financial Position

Tandem Diabetes exited the third quarter of 2024 with cash, cash equivalents and short-term investments of $473.3 million compared with $452.4 million at the end of the second quarter of 2024.

TNDM’s Updated 2024 Guidance

Tandem Diabetes raised its sales outlook for 2024.

For the full year, non-GAAP sales are now estimated to be in the range of $903-$910 million (earlier $885-$892 million). The Zacks Consensus Estimate for full-year 2024 revenues is pegged at $889.6 million.

Tandem Diabetes Care, Inc. Price, Consensus and EPS Surprise

Tandem Diabetes Care, Inc. price-consensus-eps-surprise-chart | Tandem Diabetes Care, Inc. Quote

Non-GAAP sales in the United States are expected to be in the band of $645-$650 million (previously $640-$645 million). Sales outside the United States are projected to be in the range of $258-$260 million (earlier $245-$247 million).

Our Take

Tandem Diabetes’ third-quarter earnings and revenues surpassed estimates. The company recorded the highest quarterly sales in the company's history, both in the Unites States and internationally. This strong performance was driven by TNDM’s expanding product portfolio and underscored by outstanding feedback on the newly launched Tandem Mobi. Meanwhile, the expansion of the gross margin amid rising costs is encouraging.

Also, the raised sales outlook for the full year bodes well for the stock. On the flip side, the company’s operating loss is concerning.

TNDM’s Zacks Rank & Other Key Picks

TNDM currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks from the broader medical space are Phibro Animal Health PAHC, Quest Diagnostics DGX and HealthEquity HQY.

Phibro Animal Health reported fourth-quarter fiscal 2024 adjusted earnings of 41 cents per share, which topped the Zacks Consensus Estimate by 20.6%. Revenues of $273.2 million beat the Zacks Consensus Estimate by 4.1%. PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

PAHC’s fiscal 2025 earnings are expected to surge 31.9% compared with the industry’s 11.6% growth. The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 4.1%.

Quest Diagnostics reported third-quarter 2024 adjusted earnings of $2.30 per share, which topped the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion beat the consensus mark by 3.4%. DGX carries a Zacks Rank #2 at present.

DGX’s 2024 earnings are expected to surge 2.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.3%.

HealthEquity, carrying a Zacks Rank #2 at present, reported second-quarter fiscal 2025 adjusted earnings of 86 cents per share, which surpassed the Zacks Consensus Estimate by 22.9%. Revenues of $299.9 million topped the Zacks Consensus Estimate by 5.4%.

HQY has an estimated long-term earnings growth rate of 28.2% compared with the industry’s 13.4%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.8%.

Zacks Investment Research

Myriad Genetics, Inc. MYGN reported third-quarter 2024 adjusted earnings of 6 cents per share, which beat the Zacks Consensus Estimate of 2 cents. The company reported a loss of 3 cents per share in the year-ago quarter.

Adjusted earnings exclude amortization expenses from acquired intangible assets, equity compensations and real estate optimization.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Following the earnings announcement, MYGN’s share price remained unchanged at $17.64 in after-market trading yesterday.

MYGN’s Q3 Revenues

Total revenues rose 11% year over year to $213.3 million. The figure topped the Zacks Consensus Estimate by 1.7%. Testing volumes increased 6% year over year.

MYGN’s Q3 Revenues in Detail

Hereditary Cancer testing revenues rose 5% year over year to $90.5 million.

Pharmacogenomics testing revenues totaled $47.7 million, up 34% year over year.

Tumor Profiling testing revenues rose 5% year over year to $31.6 million.

Prenatal testing revenues came in at $43.5 million, up 10% year over year.

Margin Trends

The gross margin expanded 24 basis points (bps) to 70.2%.

Research and development expenses rose 18.8% year over year to $28.5 million. SG&A expenses increased 2.2% to $139.1 million in the reported quarter.

The adjusted operating loss was $17.8 million compared with a loss of $25.8 million in the year-ago quarter.

Financial Position

Myriad Genetics exited the third quarter of 2024 with cash and cash equivalents of $99.9 million compared with $92.4 million at the end of the second quarter.

Long-term debt amounted to $39 million compared with $38.8 million at the end of the second quarter.

The cumulative net cash used in operating activities at the end of the reported quarter was $15.3 million compared with $56.2 million in the year-ago period.

MYGN’s 2024 Guidance

Myriad Genetics provided an updated 2024 guidance.

The company now expects revenues to be in the range of $837-$843 million (earlier $835-$845 million), suggesting 11-12% growth over the prior-year level. The Zacks Consensus Estimate for the same is pegged at $850 million.

Adjusted earnings per share (EPS) are now expected to be in the range of 12-14 cents (up from the earlier projection of 8-12 cents). The Zacks Consensus Estimate for the same is pegged at 10 cents.

Myriad Genetics, Inc. Price, Consensus and EPS Surprise

Myriad Genetics, Inc. price-consensus-eps-surprise-chart | Myriad Genetics, Inc. Quote

Our Take

Myriad Genetics delivered better-than-expected earnings and revenues in the third quarter of 2024. The strong performance was driven by robust growth across all the product portfolios of the company. Average revenue per test improved across the product portfolio, benefiting from expanded coverage and ongoing efforts in revenue cycle management.

Notable highlights in the quarter include establishment of a number of additional research collaborations with leading cancer research institutions, including The University of Texas MD Anderson Cancer Center and the National Cancer Center Hospital East in Japan, regarding the use of the company's Precise MRD test for breast cancer patients. Also, Myriad Genetics expanded payor coverage for its several products, including GeneSight.

The raised EPS guidance for the full year instill optimism among investors. On the flip side, the company’s operating loss during the quarter adds to the worry.

MYGN’s Zacks Rank & Key Picks

MYGN currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Phibro Animal Health PAHC, Quest Diagnostics DGX and HealthEquity HQY.

Phibro Animal Health reported fourth-quarter fiscal 2024 adjusted earnings of 41 cents per share, which topped the Zacks Consensus Estimate by 20.6%. Revenues of $273.2 million beat the Zacks Consensus Estimate by 4.1%. PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

PAHC’s fiscal 2025 earnings are expected to surge 31.9% compared with the industry’s 11.6% growth. The company’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average surprise being 4.1%.

Quest Diagnostics reported third-quarter 2024 adjusted earnings of $2.30 per share, which topped the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion beat the consensus mark by 3.4%.

DGX carries a Zacks Rank #2 (Buy) at present. DGX’s 2024 earnings are expected to surge 2.1% year over year. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.3%.

HealthEquity, carrying a Zacks Rank #2 at present, reported a second-quarter fiscal 2025 adjusted earnings of 86 cents per share, which surpassed the Zacks Consensus Estimate by 22.9%. Revenues of $299.9 million topped the Zacks Consensus Estimate by 5.4%.

HQY has an estimated long-term earnings growth rate of 28.2% compared with the industry’s 13.4%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.8%.

Zacks Investment Research