Tactile Systems Technology (TCMD) Expected to Beat Earnings Estimates

Tactile Systems Technology (TCMD) is set to report its earnings for the quarter ending September 2024, and expectations are mixed. Analysts anticipate a significant decline in earnings compared to last year, while revenues are projected to increase. This outlook creates a scenario where the actual earnings report, due on November 4, 2024, could influence the stock’s performance significantly.

If Tactile Systems' actual earnings surpass the anticipated figures, there is potential for the stock to rise. Conversely, if it underperforms, the stock's value may decline. Besides the numbers, insights from the company's management during the earnings call will also help define future expectations and the stock's immediate response.

Zacks Consensus Estimate

For the upcoming quarter, Tactile Systems Technology is expected to report earnings of $0.18 per share, reflecting a year-over-year drop of 78.8%. On the revenue side, analysts predict the company will generate approximately $75.94 million, which represents a 9.1% increase from the same quarter last year.

Estimate Revisions Trend

In the past month, the consensus EPS estimate has remained stable, which indicates that analysts are in agreement with their forecasts. However, it’s crucial to remember that changes in estimates can vary from one analyst to another, and a uniform change does not always convey their individual revisions.

Earnings Whisper

Prior to earnings announcements, estimate revisions can signal the business climate affecting the upcoming results. The Zacks Earnings ESP (Expected Surprise Prediction) model plays a key role here. This model contrasts the Most Accurate Estimate against the Zacks Consensus Estimate; the former provides the latest insights from analysts, while the latter is a broader consensus. When analysts revise their predictions right before the earnings release, it suggests they have access to the latest and potentially more accurate information.

A positive Earnings ESP is typically a strong indicator of an earnings beat, particularly when paired with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold). Historical data indicates that stocks in this category tend to produce positive surprises nearly 70% of the time, with a solid Zacks Rank enhancing predictive accuracy. However, a negative Earnings ESP reading doesn’t always mean a guaranteed miss, as predicting beats becomes increasingly difficult for stocks rated 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Tactile Systems Technology?

Currently, Tactile Systems Technology shows a promising sign: the Most Accurate Estimate exceeds the Zacks Consensus Estimate by 7.04%. This indicates that analysts have upgraded their outlook for the company recently. The stock also holds a Zacks Rank of #3, which combined with a positive Earnings ESP, suggests a strong possibility of exceeding the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?

Looking back at previous earnings reports can provide additional context. In the latest quarter, analysts expected Tactile Systems Technology to deliver earnings of $0.10 per share, but the company surprised everyone by reporting $0.20, achieving a remarkable surprise of +100%. Furthermore, in the last four quarters, Tactile Systems has consistently beaten consensus estimates.

Bottom Line

It's important to note that an earnings report's outcome alone might not dictate stock movement. Often, stocks may decline despite beating earnings due to other disappointing factors, or they may rise even after missing expectations due to unforeseen catalysts. Although backing stocks with anticipated earnings beats generally enhances success odds, it's wise to analyze the Earnings ESP and Zacks Rank before quarterly releases. Tactile Systems Technology presents a strong case for an earnings beat, yet investors should remain vigilant to other influencing factors when considering their next steps.

Expected Results of an Industry Player

In the same medical instruments sector, Waters (WAT) is expected to report earnings of $2.68 per share for the quarter ending September 2024, reflecting a slight 5.6% decrease from last year. Revenue expectations for this quarter stand at $714.25 million, up by 0.4% year-over-year. Over the past month, the EPS consensus estimate for Waters has been adjusted downward by 0.2%. Yet, it currently boasts an Earnings ESP of 0.04%, indicating a potential to exceed estimates, especially since it has also beaten predictions in the last four quarters.

Keep updated with future earnings announcements through an earnings calendar.

Earnings, Estimates, Stocks