Merit Medical Poised to Outperform Earnings Expectations Once More

Investors tracking stocks likely to surpass earnings projections might want to keep an eye on Merit Medical Systems Inc. (MMSI), a company with a strong history of outstripping earnings estimates. Positioned within the medical-dental supplies sector, this manufacturer of disposable medical devices has shown it not only meets but often exceeds earnings expectations.

A Steady Track Record

MMSI's performance over past reporting periods underlines its impressive streak, with a notable average earnings surprise of 11.69% over the last two quarters. Specifically, in its most recent quarter, the company declared earnings of $0.75 per share, significantly higher than the Zacks Consensus Estimate of $0.65, translating to a 15.38% surprise. Preceding that, Merit Medical reported $0.81 per share against a forecasted $0.75, resulting in an 8% beat.

An Uptrend in Estimates

Analysts' growing optimism towards the company's short-term earnings capacity is reflected in the rising estimates. The Zacks Earnings ESP (Expected Surprise Prediction), a measure predicting the likelihood of an earnings beat, is currently in a positive zone for Merit Medical. With a combination of a robust Earnings ESP and a favorable Zacks Rank, the evidence points towards a potential beat in MMSI's next earnings report scheduled for February 28, 2024.

Understanding the Earnings ESP

The Earnings ESP metric is significant as it contrasts the Most Accurate Estimate with the Zacks Consensus Estimate, where the former tends to incorporate more recent analyst adjustments. A positive Earnings ESP lends more confidence in meeting or exceeding the consensus estimates, and Merit Medical currently holds an Earnings ESP of +1.44%.

The Bigger Picture

While a company surpassing EPS estimates can be an indicator of financial health, it is not the only factor influencing stock movement. That's why, apart from simply watching the bottom line, monitoring the Earnings ESP may bolster the odds of making informed investments. Even with a negative ESP, predictions of an earnings miss aren't set in stone, making it all the more crucial for investors to keep abreast with a company's Earnings ESP ahead of earnings reports.

Earnings, Medical, Stocks