Zacks Investment Research downgraded
Natus Medical Inc.
) to a Zacks Rank #3 (Hold) on Jul 10, 2013.
Why the Downgrade?
On Jul 8, Natus Medical reported preliminary revenues for the
second quarter of 2013. The company expects revenues in the range
of $81-$82 million, lower than the earlier outlook of $86-$90
million. The current Zacks Consensus Estimate is pegged at $85
Following the downward revision of sales guidance, the stock
tanked 5% on Tuesday, Jul 9, to close at $11.78. Further, the
stock has declined 11.69% over the last 3 months.
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According to Natus Medical, the lower revision was mainly due to
the contagion of economic problems in the overseas market,
especially Europe. Nonetheless, revenues from the U.S. market
were in line with management's expectations. The company will
accordingly update guidance for the third quarter and full-year
2013 when it discloses second-quarter financial results.
Moreover, Natus Medical is not likely to beat earnings when it
reports exhaustive results for the second quarter on Aug 1. That
is because a stock needs to have both a positive Earnings ESP
Zacks Earnings ESP: A Better Method
) and a Zacks Rank of #1, 2 or 3 for an earnings beat.
However, the stock has a negative Zacks ESP. The Most Accurate
Estimate stands at $0.16 while the Zacks Consensus Estimate is
$0.17. This comes to a difference of -5.88%.
Natus Medical carries a Zacks Rank #3 (Hold), which increases the
predictive power of ESP. However, the Zacks Rank #3 when combined
with a -5.88% ESP makes surprise prediction difficult.
Other Stocks to Consider
Among other stocks in the medical device industry,
MAKO Surgical Corp.
Edwards Lifesciences Corp.
) appear impressive. These stocks carry a favorable Zacks Rank #2