Cyberonics Earnings Preview

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Cyberonics (NAS: CYBX) beat estimates by $0.02 last quarter and investors are hoping it can beat them again. The company will unveil its latest earnings on Friday. Cyberonics is a neuromodulation company that designs, develops, sells, and markets implantable medical devices that provide a unique, vagus nerve stimulation therapy for the treatment of refractory epilepsy and treatment-resistant depression.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Cyberonics, with eight of 11 rating it a buy and the remainder rating it a hold. Analysts like Cyberonics better than competitor ArthroCare overall. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $53.7 million in revenue this quarter. That would represent a rise of 13.1% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.30 per share. Estimates range from $0.27 to $0.32.

What our community says:
The majority of CAPS All-Stars see Cyberonics as a good bet, with 65.9% assigning it an outperform rating. The majority of the Fools are in agreement with the All-Stars as 77.7% give it an outperform rating. Fools are keen on Cyberonics, though the message boards have been quiet lately with only 55 posts in the past 30 days. Despite the majority sentiment in favor of Cyberonics, the stock has a middling CAPS rating of three out of five stars.

Management:
Cyberonics' income has fallen year over year by an average of 27.2% over the past five quarters. Revenue has now gone up for three straight quarters.

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

86.9%

87.9%

87.7%

88.3%

Operating Margin

21.9%

25.5%

24.9%

26.9%

Net Margin

13.1%

14.5%

15.3%

52.6%

For all our Cyberonics-specific analysis, including earnings and beyond, add Cyberonics to My Watchlist.

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Earnings estimates provided by Zacks

At the time this article was published

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