Tactile Systems Technology (TCMD) Expected to Beat Earnings Estimates: Can the Stock Move Higher?

Tactile Systems Technology (TCMD - Free Report) is on track to report its earnings for the quarter that ended in September 2024. While analysts anticipate a decline in earnings compared to last year, they expect revenues to rise. This situation creates an interesting backdrop for investors as they consider the company's stock performance.

The earnings report is expected to be made public on November 4, 2024. If the company performs better than anticipated in its key metrics, this could lead to an increase in its stock price. Conversely, failing to meet expectations might result in a downward movement in the stock.

Management's insights during the earnings call will be critical in determining not only how the stock reacts immediately but also in shaping future earnings forecasts. Therefore, it is beneficial to evaluate the probabilities of a positive earnings surprise.

Zacks Consensus Estimate

For this forthcoming quarter, Tactile Systems Technology is projected to post earnings of $0.18 per share, which represents a significant year-over-year decrease of 78.8%. On the revenue side, estimates suggest that the company will achieve around $75.94 million, reflecting a 9.1% increase from the same quarter last year.

Estimate Revisions Trend

Over the last 30 days, the consensus earnings-per-share (EPS) estimate has remained stable. This steadiness indicates that analysts have not significantly changed their forecasts during this period, although individual analysts may vary in their own adjustments.

Earnings Whisper

Changes in earnings estimates prior to a company's earnings announcement can provide useful insights into business performance. This is where the Zacks Earnings ESP (Expected Surprise Prediction) model comes into play. The model compares the Most Accurate Estimate against the Zacks Consensus Estimate. The Most Accurate Estimate is considered to be a more up-to-date reflection of the expected EPS, based on the latest information that analysts have.

A positive Earnings ESP suggests that actual earnings may exceed consensus estimates. This predictor is especially reliable when complemented by a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold). Research indicates that stocks with this combination often beat expectations about 70% of the time, enhancing the impact of a positive Earnings ESP.

Conversely, a negative Earnings ESP is not necessarily indicative of an earnings miss, but it does complicate predictions of a positive surprise, particularly if the stock carries a Zacks Rank of #4 (Sell) or #5 (Strong Sell).

How Have the Numbers Shaped Up for Tactile Systems Technology?

For Tactile Systems Technology, the Most Accurate Estimate is above the Zacks Consensus Estimate, reflecting improved sentiment among analysts regarding the company's earnings outlook. This has driven the Earnings ESP to +7.04%. Meanwhile, the company's Zacks Rank stands at #3.

This combination makes Tactile Systems Technology a strong candidate for surpassing the expected EPS figure.

Does Earnings Surprise History Hold Any Clue?

Evaluating a company's track record in meeting or exceeding past estimates can offer meaningful context when predicting future performance. In Tactile Systems Technology's case, for the last reported quarter, the company was anticipated to report earnings of $0.10 per share but instead delivered $0.20, achieving an impressive surprise of +100%.

Additionally, Tactile Systems Technology has consistently beaten EPS consensus estimates over the previous four quarters.

Bottom Line

While a positive or negative earnings report can influence a stock's movement, multiple factors can also affect performance beyond the earnings numbers. Some stocks might decline post-earnings even after a surprise positive result due to unmet expectations in other areas. Conversely, unforeseen positive factors can bolster a stock's price despite disappointing earnings.

Investing in stocks forecasted to surpass earnings estimates tends to improve success rates. Therefore, it is wise for investors to check the Earnings ESP and Zacks Rank before making a decision regarding a stock prior to earnings announcements. Ensure to utilize tools to identify the best investment opportunities ahead of earnings releases.

Tactile Systems Technology appears to be a promising earnings-beat candidate. However, investors should remain aware of additional influencing factors when considering this stock ahead of its earnings report.

Expected Results of an Industry Player

In the broader context of the medical device market, Waters (WAT - Free Report) is expected to report earnings of $2.68 per share for the quarter that also ended in September 2024. This represents a year-over-year decline of 5.6%. The revenue forecast for Waters stands at approximately $714.25 million, a modest increase of 0.4% from the prior year.

The consensus EPS estimate for Waters has seen a slight reduction of 0.2% in the last 30 days. Nevertheless, the company also shows an Earnings ESP of 0.04%, which suggests a higher Most Accurate Estimate. Combined with a Zacks Rank of #3 (Hold), this indicates that Waters is also likely to exceed its EPS estimates, having done so in each of the last four quarters.

Stay informed on upcoming earnings announcements with a comprehensive earnings calendar.

Tactile, Systems, Technology