Kensey Nash Earnings Preview

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Investors are bracing for a bumpy ride ahead of Kensey Nash's (NAS: KNSY) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Thursday, August 18. Kensey Nash is engaged in developing, manufacturing, and processing resorbable biomaterials products through its proprietary collagen and synthetic polymer technology.

What analysts say:

  • Buy, sell, or hold?: Half of analysts think investors should stand pat on Kensey Nash while the remaining half rate the stock as a buy. Analysts like Kensey Nash better than competitor Wright Medical Group overall. Six out of 17 analysts rate Wright Medical Group a buy compared to three of six for Kensey Nash. Analysts' rating of Kensey Nash has stayed constant from three months prior.
  • Revenue forecasts: On average, analysts predict $18.9 million in revenue this quarter. That would represent a decline of 13.5% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.34 per share. Estimates range from $0.32 to $0.36.

What our community says:
CAPS All-Stars are solidly behind the stock with 81.8% granting it an "outperform" rating. The community at large backs the All-Stars, with 83.3% awarding it a rating of "outperform." Fools have embraced Kensey Nash, though the message boards have been quiet lately with only 37 posts in the past 30 days. Kensey Nash's bearish CAPS rating of two out of five stars doesn't quite reflect Fool community sentiment.

Management:
Revenue has fallen for the past three quarters. The company's gross margin shrank by 2.2 percentage points in the last quarter. Revenue fell 6.8% while cost of sales rose 0.3% to $5.7 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. 

QuarterQ3Q2Q1Q4
Gross Margin69.3%63.5%75.1%73.6%
Operating Margin(65.1%)28.7%36.4%41.6%
Net Margin(43.3%)19.2%22.7%27.1%

One final thing: If you want to keep tabs on Kensey Nash 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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