On May 13, Zacks Investment Research upgraded
Echo Therapeutics, Inc.
) to a Zacks Rank #3 (Hold) from a Zacks Rank #4 (Sell).
Why the Upgrade?
With the release of its financial results on May 9, Echo
Therapeutics reported yet another quarter of narrower loss per
share. Loss per share of 23 cents in the 2014-first quarter
compared favorably with the year-ago quarter's loss of $1.30. The
quarter also clocked a positive earnings surprise of 11.5%.
For 2014, two estimates moved up in the past 7 days, with no
downward revision. The upward revisions led to a 10.2% rise in the
Zacks Consensus Estimate to stand at a loss of 88 cents per share.
Though Echo Therapeutics witnessed a 15.3% decline in revenues for
the last reported quarter, operating and net losses incurred were
significantly lower than last year due to substantial cost
reduction measures implemented by the company in Sep 2013.
Total operating expenses more than halved to $2.7 million from $5.5
million in the first quarter of 2013. Research and development
expenses dropped substantially by 64.3% to $1.1 million, while
selling, general and administrative expenses slid 33.1% to $1.5
million on the back of decreased personnel and other related costs.
Echo Therapeutics also revealed an improvement in its financial
position as deferred revenues decreased to $133.7 thousand at the
end of the quarter from $152.9 thousand as of Dec 31, 2013.
Going forward, Echo Therapeutics remains optimistic with regard to
the market potential for its Gen 2 Symphony CGM System. The company
continues to focus on securing the CE Mark and the subsequent
launch of Symphony in Europe as well as the initiation of the FDA
pivotal trial next year.
Moreover, the long-term expected earnings growth for Echo
Therapeutics is pegged much higher at 40.0% compared with the
industry growth of 17.1%.
Other Stocks to Consider
Some better-ranked stocks in the medical instruments industry
RTI Surgical Inc.
Globus Medical, Inc.
). While RTI Surgical sports a Zacks Rank #1 (Strong Buy), both
Accuray and Globus Medical hold a Zacks Rank #2 (Buy).
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