Cyberonics Earnings Preview

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Investors hope Cyberonics (NAS: CYBX) will top analyst estimates once again after beating predictions by $0.02 in the previous quarter. The company will unveil its latest earnings on Friday, Feb. 24. 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 seven out of nine rating it a buy and the remainder rating it a hold. Analysts like Cyberonics better than competitor Heartware International 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 $52.9 million in revenue this quarter. That would represent a rise of 12.3% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.30 per share. Estimates range from $0.28 to $0.31.

What our community says:
The majority of CAPS All-Stars see Cyberonics as a good bet, with 67.4% granting it an outperform rating. The majority of Fools (78.2%) agree with the All Stars and award it an outperform rating. The CAPS rating of five out of five stars for Cyberonics is far more upbeat than the community assessment.

Management:
Cyberonics' income has fallen year over year by an average of 30.6% 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. Margins are a representation of how efficiently a company captures portions of sales dollars. For four quarters in a row, the company has seen decreases in net margins year over year. Net margins reflect what percentage of revenue becomes profit. Here are Cyberonics' reported margins for the last four quarters:

Quarter

Q2

Q1

Q4

Q3

Gross Margin

92.3%

86.9%

87.9%

87.7%

Operating Margin

28.1%

21.9%

25.5%

24.9%

Net Margin

16.8%

13.1%

14.5%

15.3%

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Earnings estimates provided by Zacks.

At the time this article was published

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