TrovaGene Inc. TROV is scheduled to report first-quarter 2015 earnings results on May 5. Last quarter, the company reported a loss of 26 cents per share which was wider than the Zacks Consensus Estimate by 4 cents (18.2%). The average earnings surprise over the last four quarters is 4.48%.
Let us see how things are shaping up for this announcement.
Factors Influencing This Quarter
TrovaGene’s growing relationship with leading cancer centers (top 20) serves as a key catalyst for top-line growth. The partnerships with Genomac Research Institute, City of Hope and University of California-San Diego Moores Cancer Center are encouraging in our view.
Additionally, collaboration with Illumina to evaluate the potential of integrating TrovaGene's urine-based nucleic acid technology with Illumina's gene sequencing technology can be a game changer going forward.
At present, TrovaGene is focused on entering into a number of research and development (R&D) collaborations with pharmaceutical companies. These efforts will tend to raise TrovaGene’s operating expenses. Hence, an impact on profitability, however small, cannot be entirely ruled out.
What Our Model Indicates
Our proven model does not show that TrovaGene is likely to beat the Zacks Consensus Estimate in the first quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.
Zacks ESP: The Earnings ESP for Pacific Biosciences is -13.04%. This is because the Most Accurate estimate is a loss of 26 cents, while the Zacks Consensus Estimate stands at a loss of 23 cents.
Zacks Rank: TrovaGene carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Addus Homecare ADUS has an Earnings ESP of +8.33% and a Zacks Rank #2 (Buy).
Actavis plc ACT has an Earnings ESP of +1.04% and a Zacks Rank #2.
Regulus Therapeutics RGLS has an Earnings ESP of +11.54% and a Zacks Rank #2.
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