SurModics Earnings Preview

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Investors are on the edge of their collective seats, hoping that SurModics (NAS: SRDX) will top analyst expectations for the fourth consecutive quarter. The company will unveil its latest earnings on Wednesday, Jan. 25. SurModics is a provider of drug delivery and surface modification technologies to the healthcare industry.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back SurModics, with three of four rating it a buy and the remainder rating it a hold. Analysts like SurModics better than competitor NuPathe overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $12.2 million in revenue this quarter. That would represent a decline of 19.5% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.11 per share. Estimates range from $0.07 to $0.12.

What our community says:
Most CAPS All-Stars (75%) are assigning SRDX an "outperform" rating. The majority of Fools (76.1%) agree with the All-Stars and award it an "outperform" rating. Fools are gung-ho about SurModics, though the message boards have been quiet lately with only 58 posts in the past 30 days. SurModics' bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
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 company's operating margins have been increasing year-over-year for the last three quarters. Operating margins reflect the total sales revenue that the company retains after costs. Here are SurModics' reported margins for the last four quarters: 

QuarterQ4Q3Q2Q1
Gross Margin85.4%90.5%86.9%56.8%
Operating Margin(101.4%)19.2%11.7%(4.7%)
Net Margin(75.4%)21.4%14.2%(2.5%)

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

At the time this article was published Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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