Surmodics Stock Down Despite Q1 Earnings Beat, Gross Margin Up

Zimmer Biomet Holdings, Inc. ZBH is scheduled to report fourth-quarter 2024 results on Feb. 6, before market open.

See the Zacks Earnings Calendar to stay ahead of market-making news.

In the last reported quarter, the company’s earnings of $1.74 missed the Zacks Consensus Estimate by 0.57%. ZBH beat earnings estimates in three of the trailing four quarters and missed on one occasion, the average earnings surprise being 1.76%.

Q4 Estimates for ZBH

The Zacks Consensus Estimate for revenues is pegged at $2.01 billion, suggesting a 3.7% rise from the year-ago reported figure.

The Zacks Consensus Estimate for earnings is pinned at $2.30 per share, indicating a 4.6% improvement from the year-ago reported number.

The Zacks Consensus Estimate for fourth-quarter earnings has been steady over the past 90 days.

Zimmer Biomet Holdings, Inc. Price and EPS Surprise

Zimmer Biomet Holdings, Inc. price-eps-surprise | Zimmer Biomet Holdings, Inc. Quote

Factors at Play for ZBH's Q4 Earnings

Zimmer Biomet is likely to have experienced strong growth in the fourth quarter on the back of strong performance across its business segments.

The Hips business is expected to have witnessed growth banking on the company’s comprehensive suite of solutions in navigation in direct anterior stems and surgical impactors. The company is expected to have generated strong sales with Z1, the new triple-taper hip system for interior heap implant procedures, and the automated hip surgical impactor system HAMMR. Further, robotics and platforms in Navigation like OrthoGrid are expected to have gained market share in the fourth quarter. Following the completion of the OrthoGrid acquisition in the fourth quarter, the company now has a complete product portfolio in hips.

Banking on these developments, the company is expected to report a strong revenue increase within this category in the fourth quarter.

Our model estimates ZBH’s total Knee business to report 3.5% year-over-year growth in the fourth quarter.

Within the Knees business, the company earlier faced some challenges from a supply standpoint, which were expected to be resolved in the latter half of 2024. Meanwhile, Zimmer Biomet is likely to have gained from the ongoing rapid traction of the cementless Persona OsseoTi in the fourth quarter. Further, the recently launched Persona IQ study, the shortest TEM for Persona IQ, is expected to have driven continued uptake of this differentiated technology in the fourth quarter.

During the fourth quarter, Zimmer Biomet received FDA clearance for Persona SoluTion Porous Plasma Spray Femur, a total knee implant component, and FDA’s premarket application supplement approval for the Oxford Cementless Partial Knee. These developments might have had a positive impact on the company’s fourth-quarter top-line performance.

As per our model, the total Knee business is expected to report 5.5% year-over-year growth this time around.

In the fourth quarter, the S.E.T business is expected to have continued its growth run led by key areas like CMFT, upper extremities and sports. The recent FDA approval of OsseoFit Stemless Shoulder System for total shoulder replacement is expected to have contributed to the fourth-quarter top line.

Our model estimates ZBH’s total S.E.T business to report 7.3% year-over-year growth for the fourth quarter.

What Our Model Suggests for ZBH

Per our proven model, a stock with a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a higher chance of beating estimates. This is not the case here, as you can see below.

Earnings ESP: Zimmer Biomet has an Earnings ESP of 0.00%. 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 #4 (Sell).

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 reporting cycle.

Masimo MASI has an Earnings ESP of +4.05% and a Zacks Rank #1. The company is set to release fourth-quarter 2024 results on Feb. 25. You can see the complete list of today’s Zacks #1 Rank stocks here.

MASI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 17.10%. The Zacks Consensus Estimate for the company’s fourth-quarter EPS indicates an increase of 14.4% from the year-ago quarter reported figure.

Merit Medical Systems MMSI has an Earnings ESP of +3.03% and a Zacks Rank #2. The company is slated to release fourth-quarter 2024 results on Feb. 25.

MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.42%. The Zacks Consensus Estimate for Merit Medical’s fourth-quarter EPS suggests an increase of 2.5% from the year-ago quarter reported figure.

Cencora COR has an Earnings ESP of +0.71% and a Zacks Rank #2. The company is set to release first-quarter fiscal 2025 results on Feb. 2.

The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 2.45%. The Zacks Consensus Estimate for COR’s first-quarter EPS implies an increase of 7% from the year-ago reported figure.

Zacks Investment Research

Labcorp Holdings Inc. LH, or Labcorp, is slated to report its fourth-quarter 2024 results on Feb. 6 before the opening bell.

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

The renowned laboratory service provider reported adjusted earnings of $3.50 in the last reported quarter, topping the Zacks Consensus Estimate by 0.56%. Labcorp surpassed estimates in each of the trailing four quarters, the average surprise being 2.87%.

LH’s Q4 Estimates

The Zacks Consensus Estimate for Labcorp’s fourth-quarter 2024 revenues is pegged at $3.31 billion. This suggests a 9.3% rise from the year-ago reported figure.

The Zacks Consensus Estimate for its fourth-quarter 2024 EPS is expected to improve by 3% to $3.40.

Estimate Revision Trend Ahead of Labcorp’s Q4 Earnings

Estimates for Labcorp’s Q4 earnings have remained constant at $3.40 in the past 60 days.

Here’s a brief overview of the company’s progress ahead of this announcement.

Factors at Play

Diagnostics Laboratories (Dx)

The segment is likely to have continued its strong momentum in the fourth quarter of 2024, driven by both organic growth and acquisitions. Labcorp may have furthered its strategic priorities by being the ‘partner of choice’ with health systems and regional local laboratories, allowing enhanced services for patients and providers. In the third quarter of 2024, the company acquired select assets and molecular testing location of Lab Works to expand access to comprehensive testing and laboratory services in Birmingham, AL. Additionally, Labcorp closed the acquisition of select operating assets of Ballad Health outreach lab services.

In September 2024, Labcorp acquired BioReference Health's laboratory testing businesses outside of New York and New Jersey, focusing on clinical diagnostics and reproductive and women's health. Further, its collaboration with Naples Comprehensive Healthcare combines important capabilities, experience and technologies to enhance access to laboratory services. All these are expected to positively impact the company’s revenues in the fourth quarter.

Labcorp Price and EPS Surprise

Labcorp price-eps-surprise | Labcorp Quote

Labcorp is also likely to have continued to innovate and launch new tests in important therapeutic areas by harnessing science, technology and innovation. The Invitae acquisition has bolstered its specialty testing capabilities, enabling the company to use genetic data to improve clinical trials and treatment regimens in oncology and select rare diseases.

By integrating its cutting-edge genetic testing solutions, LH is now able to offer more comprehensive patient insights, covering everything from testing and diagnosis to treatment. In the oncology area, Labcorp’s status as the only provider of FDA-authorized kitted solutions for both tissue and liquid-based solid tumor testing is likely to have secured its competitive edge, contributing to the fourth-quarter top line.

We also expect Labcorp to have gained from its growing consumer-initiated test offerings on the Labcorp OnDemand channel. In October 2024, the company announced an exclusive agreement with NowDiagnostics to distribute the first over-the-counter, point-of-care Syphilis blood test granted marketing authorization by the FDA.

The Zacks Consensus Estimate indicates a 9.4% year-over-year increase in the Dx segment’s revenues in the fourth quarter of 2024.

Biopharma Laboratory Services (BLS)

The segment is likely to have benefited from continued strength in the Central Laboratories business, its largest component. Labcorp’s Global Trial Connect suite digital and data solutions are expected to have seen strong customer adoption, supported by the latest enhancements that aimed for improved site workflow efficiency and facilitated deeper insights through continued collaboration across sponsors and sites. Additionally, the Early Development unit may have witnessed improved gross orders and cancellations, boosting the overall revenues in the fourth quarter of 2024.

According to the Zacks Consensus Estimate, revenues in the BLS segment are likely to improve 7.6% year over year.

From an operational standpoint, we expect Labcorp to have met its targeted annual savings of $100-$125 million through its Launchpad initiative. For the fourth quarter of 2024, the Zacks Consensus Estimate implies an 8.2% increase in the adjusted operating income for the Dx business, while the same for the BLS arm indicates a 12.9% improvement year over year.

Earnings Whispers for Labcorp

Per our proven model, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, have a higher chance of beating estimates. This is exactly the case here, as you can see below:

Earnings ESP: Labcorp has an Earnings ESP of +0.12%. 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 #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Top MedTech Picks

Here are some other medical stocks worth considering, as these also have the right combination of elements to post an earnings beat this time:

Masimo MASI has an Earnings ESP of +4.05% and a Zacks Rank #1. The company is set to release fourth-quarter 2024 results on Feb. 25.

MASI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 17.10%. The Zacks Consensus Estimate for the company’s fourth-quarter EPS is expected to increase 14.4% from the year-ago quarter figure.

Merit Medical Systems MMSI has an Earnings ESP of +3.03% and a Zacks Rank #2. The company is slated to release fourth-quarter 2024 results on Feb. 25.

MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.42%. The Zacks Consensus Estimate for Merit Medical’s fourth-quarter EPS is expected to increase 2.47% from the year-ago quarter figure.

Cencora COR has an Earnings ESP of +0.71% and a Zacks Rank #2. The company is set to release first-quarter fiscal 2025 results on Feb. 2.

The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 2.45%. The Zacks Consensus Estimate for COR’s first-quarter EPS is expected to increase 7% from the year-ago reported figure.

Zacks Investment Research

The fourth-quarter 2024 earnings cycle is here, with quite a few healthcare companies having reported results. Early reports indicate several key growth drivers at play, including increased patient volumes, utilization, admissions, patient days and rate hikes, as well as growing demand for commercial healthcare plans and technology-enabled offerings. However, rising medical costs due to increased utilization and occupancy have partly offset the positives.

Based on our exclusive research and unique market insight, we present four stocks — Amgen Inc. AMGN, Cencora, Inc. COR, Humana Inc. HUM and Ardent Health Partners, Inc. ARDT — which are set to beat earnings estimates this earnings season.

See the Zacks Earnings Calendar to stay ahead of market-making news.

Q4 Expectations

Before delving into the specifics of what could have impacted fourth-quarter performance, let's examine the sector forecasts.

The healthcare space is a part of the broader Zacks Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry). According to the latest Earnings Trends report dated Jan. 29, the medical sector is projected to experience 12.5% growth in earnings for the fourth quarter, while revenues are anticipated to rise by 8.6%.

Factors at Play for Healthcare Stocks in Q4

The healthcare sector is vast and complex, covering hospitals, medical services, nursing homes, health insurance, medical devices, pharmaceuticals, and outpatient and home healthcare. A growing aging population and rising demand for healthcare products and services continue to drive sales for industry players.

However, investments in technology and innovation have likely pressured profit margins in the short term. Higher salaries and benefits have also increased overall costs for healthcare companies. Additionally, some HMO companies are expected to have seen a decline in Medicaid and Medicare memberships due to redeterminations.

The patient volumes likely rose in the fourth quarter, driven by more visits and surgeries. Increased revenue per admission should have further boosted top-line growth. The continued resumption of elective procedures, particularly among seniors, also contributed to higher patient volumes. However, this surge in utilization may have led to higher medical costs, potentially squeezing profit margins.

To offset rising medical cost trends, some companies likely implemented premium rate hikes, providing some financial relief. Health insurers may have also benefited from new product offerings, technological advancements, premium growth and increased investment income. Meanwhile, the demand for affordable healthcare plans may have driven higher membership in the commercial market.

On the positive side, technological innovations continue to reshape the healthcare industry. AI and automation are improving clinical workflows, enhancing diagnostics and reducing unnecessary costs. These advancements have likely helped hospitals optimize services, shorten patient wait times, enhance the overall patient experienceand lower treatment expenses.

How to Identify Potential Outperformers?

Identifying healthcare stocks with the potential for an earnings beat can be challenging amid the crowded investment landscape. However, our proprietary methodology simplifies this task, offering insights into potential outperformers. With our unique research and deep market analysis, we've identified the healthcare stocks using the Zacks Stock Screener.

These stocks have the ideal combination of two ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to surpass expectations. Our research shows that for stocks with this combination, the chances of an earnings beat are as high as 70%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Potential Outperformers

One might start with Cencora, which is one of the major pharmaceutical services companies. Headquartered in Conshohocken, PA, the company’s December-quarter earnings are expected to have benefited from increased sales of GLP-1 drugs and specialty products and higher operating income from the global specialty logistics business. Higher days payable and growth in the U.S. Healthcare Solutions business are likely to have positioned the company for an earnings beat this time around.

The Zacks Consensus Estimate for Cencora’s fiscal first-quarter earnings is pegged at $3.50 per share, which remained stable over the past week. It beat earnings estimates in all the past four quarters, with an average of 7%. COR has an Earnings ESP of +0.63% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cencora, Inc. Price and EPS Surprise

Cencora, Inc. price-eps-surprise | Cencora, Inc. Quote

You may also watch Thousand Oaks, CA-based Amgen, one of the biggest biotech companies in the world, which has an Earnings ESP of +3.15% and a Zacks Rank #3.

Its fourth-quarter earnings are likely to have gained from growing product sales in Prolia, Repatha, Kyprolis, Xgeva, Vectibix and others. Growth in rare disease drugs, mostly Horizon’s products, will likely boost its results. The Zacks Consensus Estimate for Amgen’s fourth-quarter earnings indicates a 6.4% improvement from a year ago. The estimate remained stable over the past week. It beat earnings estimates in each of the past four quarters, the average surprise being 4.1%.

Amgen Inc. Price and EPS Surprise

Amgen Inc. price-eps-surprise | Amgen Inc. Quote

Louisville, KY-based Humana also deserves mention. It is a healthcare plan provider witnessing strong premium growth, improving cost management and growing memberships. It has an Earnings ESP of +0.23% and a Zacks Rank #3. The consensus mark for fourth-quarter revenues is pegged at $28.82 billion.

An expanding value-based home care model is expected to benefit HUM’s CenterWell unit. The Zacks Consensus Estimate for Humana’s fourth-quarter earnings remained stable over the past week with no revisions in estimates. It beat earnings estimates thrice in the past four quarters and missed once, the average surprise being 0.2%.

Humana Inc. Price and EPS Surprise

Humana Inc. price-eps-surprise | Humana Inc. Quote

Finally, we have Brentwood, TN-based Ardent Health, which provides healthcare services through a network of hospitals and clinics. Rising adjusted admissions, higher revenue per admission and patient days are likely to have positioned ARDT for better-than-expected fourth-quarter earnings.

The Zacks Consensus Estimate for Ardent Health’s bottom line for the to-be-reported is pegged at 45 cents per share, which remained stable over the past week. The consensus mark for revenues is pegged at $1.49 billion. ARDT has an Earnings ESP of +0.74% and a Zacks Rank #3. It beat earnings estimates once and missed one time in the past two quarters.

Ardent Health Partners, Inc. Price and EPS Surprise

Ardent Health Partners, Inc. price-eps-surprise | Ardent Health Partners, Inc. Quote

Zacks Investment Research

Cardinal Health, Inc. CAH reported second-quarter fiscal 2025 adjusted earnings per share (EPS) of $1.93, which beat the Zacks Consensus Estimate of $1.75 by 10.3%. The bottom line also improved 2.1% year over year.

GAAP EPS in the quarter was $1.65 compared with $1.50 in the year-ago period.

Revenue Details

Sales declined 3.8% on a year-over-year basis to $55.26 billion. However, the top line beat the Zacks Consensus Estimate by 0.7%.

Segmental Analysis

Pharmaceutical and Specialty Solutions

Pharmaceutical revenues decreased 4.4% to $50.85 billion on a year-over-year basis. The decline was due to the unfavorable impact of the customer contract expiration with OptumRx in June 2024. Excluding this impact, sales were up 17%, driven by branded and specialty pharmaceutical sales growth from existing Pharmaceutical Distribution and Specialty Solutions customers.

Pharmaceutical profit totaled $531 million, up 7% from the year-ago period. The upside was driven by growth from BioPharma Solutions, including contributions from Specialty Networks and higher contributions from brand and specialty products. This growth was partially offset by the customer contract expiration.

Global Medical Products and Distribution

Revenues in this segment totaled $3.15 billion, up 0.9% year over year, driven by growth volume from existing customers.

The segment reported a profit of $18 million compared with $11 million in the year-ago quarter. This upside was primarily driven by cost optimization initiatives, partially offset by the write-off of uncollectible receivables in the WaveMark business.

Other

This segment includes three operating segments — at-Home Solutions, Nuclear and Precision Health Solutions, and OptiFreight Logistics. Sales totaled $1.28 billion, up 13% year over year.

The segment’s profit amounted to $118 million, up 11% from the year-ago level. The upside was driven by the robust performance of OptiFreight Logistics and Nuclear and Precision Health Solutions.

Cardinal Health, Inc. Price, Consensus and EPS Surprise

Cardinal Health, Inc. price-consensus-eps-surprise-chart | Cardinal Health, Inc. Quote

Margin Analysis

Gross profit increased 4.7% year over year to $1.94 billion.

As a percentage of revenues, the gross margin in the reported quarter was 3.5%, expanding 30 basis points year over year.

Distribution, selling, general and administrative expenses totaled $1.31 billion, up 2.9% year over year.

Operating income amounted to $549 million, up 8.7% year over year. Adjusted operating income increased 8.5% year over year to $635 million.

Financial Update

The company exited the reported quarter with cash and cash equivalents of $3.81 billion compared with $2.87 billion in the fiscal fourth quarter of 2024.

Net cash used in operating activities totaled $400 million against $1.18 billion in net cash provided in the year-ago period.

2025 View Updated

Cardinal Health raised its fiscal 2025 earnings guidance. The company now anticipates adjusted EPS between $7.85 and $8.00, up from the previous guidance of $7.75-$7.90. The Zacks Consensus Estimate for the same is pegged at $7.84.

The company expects revenues from its Pharmaceutical segment to decline 1-3% year over year from the previous guidance of a 2-4% decline. Segmental profit is likely to increase 10-12% from the previous guidance of 4-6%.

Revenues from the Medical segment are estimated to grow 2-4%. Segmental profit is expected to be in the range of $130-$150 million compared with the previous guidance of $140-175 million.

Revenues from the Other segment are likely to grow 10-12% from the previous projection of 10%. Segmental profit is likely to grow nearly 10%.

Conclusion

Cardinal Health exited the fiscal second quarter on a positive note, with earnings and revenues beating their respective Zacks Consensus Estimate. The company continued to witness strong demand for its Pharmaceutical and Specialty solutions. However, sales are likely to be under pressure due to OptumRx contract expiration.

Meanwhile, CAH’s medical products, at-Home Solutions, Nuclear and Precision Health Solutions and OptiFreight Logistics are likely to support top-line growth going forward. An improvement in segmental profit looks promising. The expansion of gross margin also bodes well.

Also, CAH announced the completion of its acquisition of a majority stake in GI Alliance. With over 900 physicians across 345 practice locations in 20 states, GI Alliance is the country's leading gastroenterology management services organization. The acquisition accelerates Cardinal Health's multi-specialty growth strategy. However, intense competition and customer concentration are concerning.

CAH’s Zacks Rank and Other Stocks to Consider

Cardinal Health carries a Zacks Rank #2 (Buy) at present.

Some other top-ranked stocks in the broader medical space are Masimo MASI, ResMed Inc. RMD and DaVita Inc. DVA.

Masimo, carrying a Zacks Rank #2 at present, has an estimated growth rate of 11.8% for 2025. MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Its shares have risen 51.4% compared with the industry’s 6.8% growth in the past year.

ResMed, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 14.8%. RMD’s earnings surpassed estimates in each of the trailing four quarters, with the average being 6.4%.

ResMed has gained 32.4% compared with the industry’s 16.5% growth in the past year.

DaVita, sporting a Zacks Rank of 1 at present, has an estimated long-term growth rate of 18.3%. DVA’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 10.6%.

Zacks Investment Research

Edwards Lifesciences Corporation EW is expected to report fourth-quarter 2024 results shortly.

See the Zacks Earnings Calendar to stay ahead of market-making news.

In the last reported quarter, the company’s adjusted earnings per share of 67 cents were in line with the Zacks Consensus Estimate. The company’s earnings beat estimates in one of the trailing four quarters and matched estimates in the other three. EW has a trailing four-quarter earnings surprise of 0.78% on average.

Q4 Estimates

The Zacks Consensus Estimate for the company’s fourth-quarter 2024 revenues is pegged at $1.36 billion, suggesting an 11.2% decline from the year-ago reported figure.

The Zacks Consensus Estimate for fourth-quarter 2024 net earnings of 55 cents per share indicates a 14.1% drop from the year-ago reported figure.

For the fourth quarter of 2024, the company projected total sales to be between $1.33 billion and $1.39 billion. It expects adjusted EPS in the band of 53 cents to 57 cents.

Edwards Lifesciences Corporation Price and EPS Surprise

Edwards Lifesciences Corporation price-eps-surprise | Edwards Lifesciences Corporation Quote

The Zacks Consensus Estimate for earnings has been unchanged over the past 30 days.

Factors at Play

Similar to the last reported quarter, Edwards Lifesciences is likely to have gained from its patient-focused innovation strategy. A favorable hospitalization trend, strong global adoption of transcatheter heart valves and improved procedural volume are expected to have driven growth in the fourth quarter. However, the absence of Critical Care business operation through September is likely to have impacted the full fourth-quarter total revenues of Edwards Life Sciences.

On Sept. 3, 2024, the company announced the completion of the sell-off of the Critical Care product group to Becton, Dickinson and Company or BD, for a total value of $4.2 billion. This business recorded full-quarter revenues of $246 million in the second quarter of 2024, reflecting 7% year-over-year growth. The absence of this segment for an entire quarter is expected to have a significant impact on the company's fourth-quarter revenues on a year-over-year basis.

Within the Transcatheter Aortic Valve Replacement (TAVR) arm, Edwards Lifesciences is likely to have witnessed continued growth in procedures across the United States and worldwide. Continued strong demand for the company’s SAPIEN platform is expected to have acted as the primary growth factor. SAPIEN currently constitutes the majority of the company’s sales within the United States.

However, at the time of the third-quarter earnings release, the company talked about certain regional pressures hampering growth within the segment. In the third quarter, in Japan, slower market growth put pressure on results. This might have continued even in the fourth quarter.

For the fourth quarter, EW’s earlier-provided guidance assumed year-over-year TAVR growth below the full-year TAVR growth expectation of 5% to 7%. One of the reasons behind this was a tough year-over-year comparison. Further, the impact from hurricanes in the southeast, as well as a one-time impact from a China distributor rebate adjustment during the to-be-reported quarter are expected to have impacted the performance within TAVR.

The company’s Transcatheter Mitral and Tricuspid Therapies (TMTT) segment’s PASCAL platform is likely to have maintained strong growth momentum in the fourth quarter globally, backed by its portfolio of differentiated therapies, positive pivotal trial results to support approvals and adoption and favorable real-world clinical outcomes. The TMTT segment’s performance is expected to have been driven by the strong adoption of the differentiated PASCAL Precision platform across the United States and Europe. Further, the company is expected to have gained business with the continued adoption of the EVOQUE tricuspid replacement system and the strong performance of the SAPIEN M3 mitral replacement system in the United States and Europe.

Our model estimates the Transcatheter Heart Valves business to report revenues of $1.10 billion, implying a 5.9% improvement from the year-ago period.

Within Surgical Structural Heart, the company is expected to have recorded strong fourth-quarter growth, banking on the penetration of its premium products across all regions.

Edwards Lifesciences is likely to have gained from strong global adoption of its premium RESILIA technology and improvement in procedural volumes. Edwards Lifesciences is expected to have seen strong global adoption of premium surgical technologies, including the MITRIS RESILIA valve, INSPIRIS and KONECT. In the fourth quarter, the company is expected to have witnessed procedure growth globally within Surgical.

Our model estimates the segment’s fourth-quarter revenues to be $264.8 million, suggesting a 6.7% rise from the year-ago quarter’s reported figure.

However, staffing shortages, which reduced hospital capacity, and choppy market conditions due to a difficult geopolitical situation are likely to have impeded the company’s growth in the quarter to be reported.

What Our Quantitative Model Predicts

Per our proven model, stocks with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a good chance of beating estimates. This is not the case here, as you can see:

Earnings ESP: Edwards Lifesciences has an Earnings ESP of -0.03%. 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 a few medical stocks worth considering, as these have the right combination of elements to post an earnings beat this quarter.

Masimo MASI has an Earnings ESP of +4.05% and a Zacks Rank #1. The company is set to release fourth-quarter 2024 results on Feb. 25. You can see the complete list of today’s Zacks #1 Rank stocks here.

MASI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 17.10%. The Zacks Consensus Estimate for the company’s fourth-quarter EPS implies an increase of 14.4% from the year-ago quarter reported figure.

Merit Medical Systems MMSI has an Earnings ESP of +3.03% and a Zacks Rank #2. The company is slated to release fourth-quarter 2024 results on Feb. 25.

MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.42%. The Zacks Consensus Estimate for Merit Medical’s fourth-quarter earnings implies an increase of 2.5% from the year-ago quarter figure.

Cencora COR has an Earnings ESP of +0.71% and a Zacks Rank #2. The company is set to release first-quarter fiscal 2025 results on Feb. 2.

The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 2.45%. The Zacks Consensus Estimate for COR’s first-quarter EPS suggests an increase of 7% from the year-ago reported figure.

Zacks Investment Research

Bio-Techne Corporation TECH is set to release its second-quarter fiscal 2025 results on Feb. 5, before the opening bell.

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

The life science and diagnostic product maker posted adjusted earnings per share (EPS) of 42 cents in the last reported quarter, which exceeded the Zacks Consensus Estimate by 10.53%. The company topped earnings estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.55%.

Q2 Estimates for TECH

For the fiscal second quarter, the Zacks Consensus Estimate for Bio-Techne’s revenues is pegged at $285.3 million, indicating an increase of 4.7% from the year-ago reported figure.

The Zacks Consensus Estimate for the company’s second-quarter fiscal 2025 EPS suggests a 5% decline to 38 cents.

Estimates for Bio-Techne’s fiscal second-quarter earnings have remained unchanged in the past 90 days.

Bio-Techne Corp Price and EPS Surprise

Bio-Techne Corp price-eps-surprise | Bio-Techne Corp Quote

Factors Influencing Bio-Techne's Fiscal Q2 Performance

Bio-Techne’s cell and gene therapy vertical within the Protein Sciences segment has shown continued traction in recent quarters, banking on strong performances of the company’s proteomic reagent and scalable workflow solutions that enable customers to accelerate e-clinical, clinical and eventually aid in the commercialization of these next-generation therapeutics. New customer additions over the past two years have led to a significant expansion of this business. In the fiscal second quarter, the company is expected to have witnessed improved stabilization from large- pharma customers and an increase in ordering trends from biotech customers.

Further, the company’s newly added Simple Western platform called Leo (a high-throughput automated western blot system, enabling the simultaneous analysis of up to 100 samples in a single three-hour run) gained significant customer interest in the first quarter of fiscal 2025, being increasingly used for absolute protein quantitation and relative potency assay. This might have contributed to the top line in the fiscal second quarter.

A gradually easing biotech funding scenario might have increased biotech spending, contributing to the company’s business.

The consensus estimate for Protein Sciences revenues is pegged at $197.7 million for the fiscal second quarter, almost in line with the year-ago period reported figure.

Within the Diagnostics and Spatial Biology segment (previously referred to as the Diagnostics and Genomics segment), in the Spatial Biology growth vertical, despite the budget reset by pharma customers, Bio-Techne is expected to have witnessed solid growth, banking on the strong adoption of the company’s new spatial biology instrument COMET.

In the calendar year 2024, Bio-Techne enabled RNA detection and visualization on COMET with the launch of RNAscope HiPlex capabilities for the instrument. Following this launch, COMET is now capable of detecting and visualizing up to 24 plate proteins and 12 RNA targets simultaneously, creating a highly differentiated multiomic system for the rapidly growing spatial biology market. These enhanced capabilities are expected to have expanded the company’s business in the fiscal second quarter.

The launch of Bio-Techne's R&D system branded antibodies validated for use on the COMET is also expected to have aided the company.

Meanwhile, the Molecular Diagnostics growth vertical is already in growth acceleration mode as its unique and underpenetrated portfolio of products (including ExoDx prostate test and Asuragen kit business) continues to take market share. In the fiscal second quarter, too, this trend is likely to have continued, banking on the ongoing traction and market adoption of this portfolio.

The consensus estimate for Diagnostics and Spatial Biology revenues is pegged at $75.4 million for the fiscal second quarter, which implies no change from the year-ago period reported figure.

What Our Model Unveils for TECH

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, as you can see.

Earnings ESP: Bio-Techne has an Earnings ESP of 0.00%. 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 #4 (Sell).

MedTech Stocks to Consider

Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this time:

Masimo MASI has an Earnings ESP of +4.05% and a Zacks Rank #1. The company is set to release fourth-quarter 2024 results on Feb. 25. You can see the complete list of today’s Zacks #1 Rank stocks here.

MASI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 17.10%. The Zacks Consensus Estimate for the company’s fourth-quarter EPS indicates an increase of 14.4% from the year-ago quarter reported figure.

Merit Medical Systems MMSI has an Earnings ESP of +3.03% and a Zacks Rank #2. The company is slated to release fourth-quarter 2024 results on Feb. 25.

MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.42%. The Zacks Consensus Estimate for Merit Medical’s fourth-quarter EPS suggests an increase of 2.5% from the year-ago quarter reported figure.

Cencora COR has an Earnings ESP of +0.71% and a Zacks Rank #2. The company is set to release first-quarter fiscal 2025 results on Feb. 2.

The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 2.45%. The Zacks Consensus Estimate for COR’s first-quarter EPS implies an increase of 7% from the year-ago reported figure.

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