Palomar Medical Technologies Earnings Preview

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Investors never know what to expect for Palomar Medical Technologies (NAS: PMTI) , as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest earnings Thursday. Palomar Medical Technologies is a researcher and developer of innovative aesthetic light-based systems for hair removal and other cosmetic procedures, including both lasers and high-powered lamps.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Palomar Medical Technologies, with four of five rating it a buy and the remainder rating it a hold. Analysts like Palomar Medical Technologies better than competitor C.R. Bard overall. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared with three months ago.
  • Revenue forecasts: On average, analysts predict $16.8 million in revenue this quarter. That would represent a rise of 8% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is a loss of $0.11 per share. Estimates range from a loss of $0.15 to a loss of $0.06.

What our community says:
CAPS All-Stars are solidly behind the stock, with 96.2% granting it an "outperform" rating. The community at large concurs with the All-Stars, with 94.7% awarding it a rating of "outperform." Fools have embraced Palomar Medical Technologies and haven't been shy with their opinions lately, logging 223 posts in the past 30 days. Even with a robust four out of five stars, Palomar Medical Technologies' CAPS rating falls a little short of the community's upbeat outlook.

Management:
Revenue has now gone up for three straight quarters. The company's gross margin shrank by 5.8 percentage points in the last quarter. Revenue rose 13.5% while cost of sales rose 32.3% to $7.4 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

59%

62%

63.6%

66%

Operating Margin

-10.9%

-15.7%

-15.6%

-10%

Net Margin

-10.4%

-15.6%

-12.8%

-10.9%

One final thing: If you want to keep tabs on Palomar Medical Technologies movements, and for more analysis on the company, make sure you add it to your watchlist.

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At the time this article was published

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