Markets

Anthem (ANTM) to Report Q2 Earnings: What's in the Cards?

Anthem Inc. ANTM will release second-quarter 2020 results on Jul 29, before market open.

In the last reported quarter, the company’s earnings of $6.48 per share missed the Zacks Consensus Estimate by 0.9%. However, the bottom line improved 7.5% year over year on the back of higher membership. Its revenues too rose owing to higher premium revenues from rate increases to cover the overall cost trends including the return of the health insurance tax in 2020, and membership growth.

Let’s see how things are shaping up prior to the earnings announcement.

The company’s performance is likely to have been driven by solid revenues. The Zacks Consensus Estimate for second-quarter top line stands at $29.4 billion, implying 16.9% growth from the prior-year reported number. Several factors, such as strong premiums and rising membership are likely to have fuelled growth for this metric.

Per its last earnings call, management expected second-quarter Medical Loss Ratio (MLR) to significantly decline from the historical levels, mainly because of deferred elective procedures.

The consensus mark for Government business revenues indicates a 15.5% improvement from the year-earlier reported figure.

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at $8.77, suggesting an 89% increase from the year-ago reported figure. This impressive upside is likely to have been aided by the company’s sturdy revenue base.

Expansion in Telehealth business might have also contributed to the favorable performances. The company is also likely to have witnessed progress in organic growth and a rise in membership in the to-be-reported quarter.

The consensus mark for membership of Government business hints at a hike of 10.1% from the prior-year reported number while the same for Commercial business implies a hike of 1.3%.

Further, the company is expected to have witnessed strength in Medicaid members on the back of contract wins.

Additionally, Anthem is likely to have benefited from a steady cash flow in the second quarter.

However, the company might have incurred heavy selling, general and administrative expenses due to value-based care arrangements.

What the Quantitative Model States

Our proven model predicts an earnings beat for Anthem this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates, which you can see below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Anthem has an Earnings ESP of +4.91%. This is because the Most Accurate Estimate is pegged at $9.20, higher than the Zacks Consensus Estimate of $8.77.

Anthem, Inc. Price and EPS Surprise

Anthem, Inc. Price and EPS Surprise

Anthem, Inc. price-eps-surprise | Anthem, Inc. Quote

Zacks Rank: Anthem carries a Zacks Rank #2, which increases the predictive power of ESP. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Here are a few other stocks worth considering from the medical sector with the perfect mix of elements to also beat on earnings in the respective upcoming releases:

Tenet Healthcare Corporation THC has an Earnings ESP of +7.87% and a Zacks Rank of 3, currently. The company is scheduled to release second-quarter earnings on Aug 3.

Molina Healthcare, Inc. MOH is set to report second-quarter earnings on Jul 30. The stock is currently a #2 Ranked player and has an Earnings ESP of +4.08%.

bluebird bio, Inc. BLUE is set to report second-quarter earnings on Aug 6. The stock presently has a Zacks Rank #3 and an Earnings ESP of +69.17%.

Zacks Top 10 Stocks for 2020

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?

Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2020 today >>


Click to get this free report

Molina Healthcare, Inc (MOH): Free Stock Analysis Report

Tenet Healthcare Corporation (THC): Free Stock Analysis Report

Anthem, Inc. (ANTM): Free Stock Analysis Report

bluebird bio, Inc. (BLUE): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More