Zynex (ZYXI) to Report Q2 Earnings: What's in the Cards?

Zynex, Inc. ZYXI is slated to report second-quarter 2020 results on Jul 28, after the closing bell.

In the last-reported quarter, the company’s earnings per share (EPS) of 9 cents surpassed the Zacks Consensus Estimate by 28.57%. Moreover, its earnings surpassed the consensus estimate in three of the last four quarters and lagged in one. The trailing four-quarter average surprise was 10.27%.

Let's see how things have shaped up prior to the announcement.

Factors at Play

Zynex’s revenue growth has decelerated on fewer orders received as a result of the pandemic. According to the company, COVID-19 not only impacted availability of physicians to prescribe its electrotherapy and pain management products but also resulted in employee and supply chain issues. The company reported approximately 35% drop in April orders compared with the January and February average. We believe that with the pandemic situation remaining almost the same through the rest of the second quarter, this issue may have hurt its quarterly revenue growth significantly.

Zynex Inc. Price and EPS Surprise

Zynex Inc. Price and EPS Surprise

Zynex Inc. price-eps-surprise | Zynex Inc. Quote

In terms of cash collection, however, the company had expected to maintain a strong position in the second quarter. Zynex’s cash collection in April was in fact stronger than the usual cash collection levels of other years. According to the company, generally in the first half of the year, cash collection performance remains dull because of difficulties related to patient's insurance deductibles. However, this year, because of the ongoing healthcare crisis, a few very large insurance companies decided to scrutinize claims less than they normally do and that expedited payments a little. This indicates that Zynex’s cash collection process remained uninterrupted through the second quarter.

Further, Zynex’s pain management products are expected to have witnessed strong demand in the second quarter. According to the company, of late, opioid abuse has led to death of thousands of patients a year. In such a situation, the company’s products for pain management and rehabilitation have been recognized as some of the best in the industry and accordingly are gaining market in leaps and bounds. This is expected to have boosted quarterly revenues.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter 2020 revenues is pegged at $19.1 million, suggesting 85.6% rise from the year-ago reported figure.

The Zacks Consensus Estimate for the company’s EPS of 9 cents suggests a rise of 50% from the year-ago reported figure.

What Our Model Suggests

Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. However, this is not the case here as you can see:

Earnings ESP: Zynex has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).

Stocks Worth a Look

Here are a few medical stocks with the right combination of elements to beat on earnings this reporting cycle. You can see the complete list of today’s Zacks #1 Rank stocks here.

Integra LifeSciences Holdings Corporation IART has an Earnings ESP of +20.69% and a Zacks Rank #2.

Exact Sciences Corporation EXAS has an Earnings ESP of +6.69% and a Zacks Rank #2.

Laboratory Corporation of America Holdings LH or LabCorp has an Earnings ESP of +134.19% and a Zacks Rank #2.

Zacks Top 10 Stocks for 2020

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Integra LifeSciences Holdings Corporation (IART): Free Stock Analysis Report

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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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