Matinas Biopharma Holdings, Inc. (MTNB) May Report Negative Earnings: Know the Trend Ahead of Q3 Release

Matinas Biopharma Holdings, Inc. (MTNB) is expected to deliver flat earnings compared to the year-ago quarter on higher revenues when it reports results for the quarter ended September 2021. This widely-known consensus outlook gives a good sense of the company’s earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.

The earnings report might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.

While management’s discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it’s worth having a handicapping insight into the odds of a positive EPS surprise.


Zacks Consensus Estimate

This company is expected to post quarterly loss of $0.03 per share in its upcoming report, which represents no change from the year-ago quarter.

Revenues are expected to be $0.23 million, up 130% from the year-ago quarter.


Estimate Revisions Trend

The consensus EPS estimate for the quarter has been revised 16.67% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.


Price, Consensus and EPS Surprise


Earnings Whisper

Estimate revisions ahead of a company’s earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model — the Zacks

Earnings ESP

(Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model’s predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce

a positive surprise nearly 70% of the time

, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).


How Have the Numbers Shaped Up for Matinas Biopharma Holdings, Inc.

For Matinas Biopharma Holdings, Inc.The Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%.

On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination makes it difficult to conclusively predict that Matinas Biopharma Holdings, Inc. Will beat the consensus EPS estimate.


Does Earnings Surprise History Hold Any Clue?

While calculating estimates for a company’s future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it’s worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Matinas Biopharma Holdings, Inc. Would post a loss of $0.02 per share when it actually produced a loss of $0.02, delivering no surprise.

The company has not been able to beat consensus EPS estimates in any of the last four quarters.


Bottom Line

An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it’s worth checking a company’s Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our

Earnings ESP Filter

to uncover the best stocks to buy or sell before they’ve reported.

Matinas Biopharma Holdings, Inc. Doesn’t appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.


Tech IPOs With Massive Profit Potential:

Last years top IPOs surged as much as 299% within the first two months. With record amounts of cash flooding into IPOs and a record-setting stock market, this year could be even more lucrative.


See Zacks’ Hottest Tech IPOs Now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.

Click to get this free report


To read this article on Zacks.com click here.