Fulgent Genetics, Inc.
FLGT
is slated to report first-quarter results on May 6, after the closing bell.
In the last-reported quarter, the company’s earnings of $6.20 beat the Zacks Consensus Estimate by 40.6%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and broke even in one, the average beat being 503.33%.
Let’s see how things have shaped up prior to this announcement.
Factors at Play
With the pandemic situation more or less remaining unchanged through the months of the first quarter, Fulgent Genetics is expected to have maintained strength in its COVID-19 testing solutions business. Over the past few months, the company has significantly expanded its lab capacity and invested in resources to achieve biosafety certification required to handle COVID-19 tests, which have gained huge market acceptance as well. This trend is expected to have significantly boosted the first-quarter top line.
During the last-quarter earnings call, Fulgent Genetics noted that billable tests in the quarter raised more than 200 times the volume of fourth-quarter 2020 led by business related to COVID-19. With the continued requirement of COVID-related testing, we expect billable test volumes to have continued growth momentum in the to-be reported quarter.
On the customer front, the company was recognized as the number one provider of COVID-19 tests in the state of California by California Department of Public Health in late January, processing the highest volumes of tests. We expect this huge market reach and vast testing volume to have continued in the first quarter as well, contributing to revenue growth.
Further, despite pandemic-led disruption, Next Generation Sequencing business (NGS) continued to grow in 2020. Volumes of NGS test grew significantly in the last-reported quarter. Fulgent Genetics, during the last earnings call, noted that the NGS business is expected to grow more than 92% year over year in 2021. We expect part of this growth to get reflected in the to-be reported quarter results.
FULGENT GENETIC Price and EPS Surprise
During the last earnings call, Fulgent Genetics registered growth in NGS-based COVID-19 test volumes and realized its huge potential to win more customers. With the emergence of a growing number of variants through the first quarter, we expect this test to have gained larger market access in the first quarter.
The Estimate Picture
For first-quarter 2021, the Zacks Consensus Estimate for total revenues is pegged at $317.1 million, implying a rise of 3991.7% year over year.
The consensus estimate for earnings per share is pegged at $5.99. The company had reported earnings of 4 cents per share in the year-ago quarter.
What Our Model Suggests
Our proven model does not conclusively predict an earnings beat for Fulgent Genetics this time around. The combination of a positive
Earnings ESP
and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But this is not the case here as you will see below.
Earnings ESP:
Fulgent Genetics 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 a few medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle.
HCA Healthcare, Inc.
HCA
has an Earnings ESP of +3.26% and a Zacks Rank of 1, at present. You can see
the complete list of today’s Zacks #1 Rank stocks here.
Chemed Corporation
CHE
currently has a Zacks Rank #2 and an Earnings ESP of +2.04%.
Avenue Therapeutics, Inc.
ATXI
has an Earnings ESP of +16.67% and a Zacks Rank of 2, at present.
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