Pacific Biosciences of California Inc. PACB is scheduled to report second-quarter 2015 earnings results on Aug 5. Last quarter, the company reported a loss of 27 cents per share, in line with the Zacks Consensus Estimate. The average earnings surprise over the last four quarters is 8.8%.
Let us see how things are shaping up for this announcement.
Factors Influencing This Quarter
Pacific Biosciences develops, manufactures and markets PacBio RS II Sequencing systems, which help in studying synthesis, composition, structure, and regulation of deoxyribonucleic acid, popularly known as DNA.
We believe that Pacific Biosciences has significant growth prospects in plant & animal as well as human genome sequencing. The company’s leading position in microbial sequencing also presents it a significant growth opportunity in the infectious disease market.
New products like the barcode sample prep kits continue to expand the company’s product portfolio. Additionally, development and distribution collaborations with the likes of Roche NimbleGen and RainDance Technologies will drive market penetration going forward.
However, persistent losses and cash burning are the primary headwinds facing the company at present.
Earnings Whispers
Our proven model does not conclusively show that Pacific Biosciences 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. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP for Pacific Biosciences is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 27 cents.
Zacks Rank: Pacific Biosciences’ Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings beat.
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.
Agios Pharmaceuticals AGIO with an Earnings ESP of +75% and a Zacks Rank #1.
TransEnterix TRXC with an Earnings ESP of +7.14% and a Zacks Rank #2.
HCA Holdings HCA with an Earnings ESP of +1.48% and a Zacks Rank #2.
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