Markets

Why Harvard Bioscience (HBIO) Might be Well Poised for a Surge

Harvard Bioscience (HBIO) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.

Analysts' growing optimism on the earnings prospects of this medical instruments maker is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Harvard Bioscience, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The company is expected to earn $0.08 per share for the current quarter, which represents a year-over-year change of +14.29%.

The Zacks Consensus Estimate for Harvard Bioscience has increased 16.67% over the last 30 days, as one estimate has gone higher compared to no negative revisions.

Current-Year Estimate Revisions

The company is expected to earn $0.18 per share for the full year, which represents a change of -10% from the prior-year number.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, one estimate has moved up for Harvard Bioscience versus no negative revisions. This has pushed the consensus estimate 9.09% higher.

Favorable Zacks Rank

Thanks to promising estimate revisions, Harvard Bioscience currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

While strong estimate revisions for Harvard Bioscience have attracted decent investments and pushed the stock 7.2% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.


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

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