Markets
COO

Can Nutrisystem (NTRI) Surprise Investors in Q4 Earnings?

Weight management products and service provider, Nutrisystem Inc.NTRI is scheduled to release fourth-quarter 2016 results on Feb 27.

Nutrisystem has an impressive track of beating estimates in three of the four trailing quarters. However, in the last reported quarter, it earnings missed the estimate. Overall, its record is still good as evident from its four-quarter average positive surprise of 19.67%. Over the past one year, Nutrisystem returned almost 78.55%, which is higher than the Zacks categorized Consumer Products - Discretionary sub-industry's gain of roughly 20.41%.

NutriSystem Inc Price and EPS Surprise

NutriSystem Inc Price and EPS Surprise | NutriSystem Inc Quote

Let's see how things are shaping up prior to this quarter.

Factors at Play

Nutrisystem's innovative products are expected to expand its customer base that will eventually drive reactivation revenues (generated from existing customers after the first nine months of their purchase). However, a sluggish dieting market and intensifying competition are the primary headwinds for the near term.

For the fourth quarter of 2016, management expects revenues in the range of $96.5 million to $101.5 million. Meanwhile, adjusted EBITDA is forecast in the range of $14.4 million to $16.4 million. Earnings per share are expected in the band of 20-25 cents per share, including expense of 2 cents per share related to the South Beach Diet and Shake360 initiatives.

However, overall activities of Express Scripts during the fourth quarter were inadequate to win analysts' confidence. As a result, the Zacks Consensus Estimate for the quarter to be reported fell 2 cents to 24 cents per share in the last 90 days.

Earnings Whispers

Our proven model does not conclusively show that Nutrisystem is likely to beat on earnings this quarter. That 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: Nutrisystem has an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 24 cents per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Nutrisystem carries a Zacks Rank #3, which increases the predictive power of ESP.

Though a favorable Zacks Rank increases the predictive power of ESP, the company's 0.00% ESP makes surprise prediction difficult. Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks that Warrant a Look

Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

DaVita HealthCare Partners Inc. DVA has an Earnings ESP of +4.40% and a Zacks Rank #3. Additionally, on an average, the stock recorded a positive surprise of almost 3.77% in the last four trailing quarters.

The Cooper Companies COO has an Earnings ESP of +2.69% and a Zacks Rank #2. The stock posted a positive surprise of almost 6.32% in the last four trailing quarters. You can see the complete list of today's Zacks #1 Rank stocks here .

Exilixis, Inc. EXEL has an Earnings ESP of +200% and a Zacks Rank #2. The stock registered a positive earnings surprise of 107.69% in the last reported quarter.

Zacks' Top 10 Stocks for 2017

In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?

Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Exelixis, Inc. (EXEL): Free Stock Analysis Report

DaVita HealthCare Partners Inc. (DVA): Free Stock Analysis Report

Cooper Companies, Inc. (The) (COO): Free Stock Analysis Report

NutriSystem Inc (NTRI): 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.


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

In This Story

COO DVA EXEL

Other Topics

Earnings 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