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Hims & Hers Health, Inc.’s earnings (HIMS) Expected to Rise: Should You Buy?

Vaseline3 weeks ago

0 4 minutes read

Hims & Hers Health, Inc.’s earnings (HIMS) Expected to Rise: Should You Buy?

Wall Street expects year-over-year earnings growth on higher revenues when Hims & Hers Health, Inc. (HIMS) reports its results for the quarter ending September 2024. While this widely known consensus outlook is important in measuring the company’s earnings picture, one powerful factor that could impact the stock price in the near term is how the actual results relate to these estimates.

The earnings report, which is expected to be released on November 4, 2024, could help the stock price rise if these key figures are better than expected. On the other hand, if they miss, the stock could go lower.

While management’s discussion of business conditions on the earnings call will largely determine the sustainability of the immediate price change and future earnings expectations, it’s worth having some insight into the chances of a positive EPS surprise.

This company is expected to post quarterly earnings of $0.06 per share in its upcoming report, which represents a year-over-year change of +250%.

Revenue is expected to reach $382.09 million, up 68.5% from the same quarter last year.

The consensus EPS estimate for the quarter has remained unchanged over the past thirty days. This is essentially a reflection of how the respective analysts have collectively reassessed their initial estimates over this period.

Investors should note that the direction of estimate revisions by each covered analyst may not always be reflected in the overall change.

Estimate revisions prior to a company’s earnings release provide clues to business conditions for the period for which the results are being announced. This insight is at the heart of our proprietary surprise forecast model: the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the most accurate estimate to the Zacks Consensus Estimate for the quarter; the most accurate estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts who revise their estimates just before earnings releases have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had previously predicted.

Thus, a positive or negative Earnings ESP value theoretically indicates the likely deviation of actual earnings from the consensus estimate. However, the predictive power of the model is only significant for positive ESP measurements.

A positive Earnings ESP is a strong predictor of earnings growth, especially when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination deliver a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP value is not indicative of a missed profit. Our research shows that it is difficult to forecast earnings growth with any degree of confidence for stocks with a negative Earnings ESP rating and/or a Zacks Rank of 4 (Sell) or 5 (Strong Sell).

For Hims & Hers Health, the most accurate estimate is lower than the Zacks Consensus Estimate, indicating that analysts have recently become bearish on the company’s earnings prospects. This has resulted in an Earnings ESP of -11.42%.

On the other hand, the stock currently has a Zacks Rank of #3.

So this combination makes it difficult to convincingly predict that Hims & Hers Health will beat the consensus EPS estimate.

Analysts often consider how well a company has managed to match past consensus estimates when calculating their estimates for future earnings. So it’s worth looking at the surprise history to gauge its influence on the upcoming issue.

For the last reported quarter, Hims & Hers Health was expected to post earnings of $0.05 per share when it actually produced earnings of $0.06, delivering a surprise of +20%.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

A profit margin or profit loss does not have to be the only basis for a share price increase or decrease. Many stocks ultimately lose ground despite an earnings decline due to other factors that disappoint investors. Likewise, unforeseen catalysts help some stocks rise despite earnings losses.

That said, betting on stocks that are expected to beat earnings estimates increases the odds of success. That’s why it’s worth checking a company’s Earnings ESP and Zacks Rank before its quarterly release. Make sure you use our Earnings ESP filter to discover the best stocks to buy or sell before they report.

Hims & Hers Health doesn’t seem like a compelling candidate to beat earnings. However, investors should also pay attention to other factors when betting on or staying away from this stock before its earnings release.

Among stocks in the Zacks Medical Info Systems sector, GE HealthCare Technologies (GEHC) is expected to soon post earnings of $1.06 per share for the quarter ending September 2024. This estimate indicates a year-over-year change of +7.1%. This quarter’s revenue is expected to be $4.86 billion, up 0.9% from last year’s quarter.

The consensus EPS estimate for GE HealthCare has remained unchanged over the past 30 days. However, a higher most accurate estimate has resulted in an Earnings ESP of 0.27%.

This Earnings ESP, combined with the Zacks Rank #3 (Hold), suggests that GE HealthCare will most likely beat the consensus EPS estimate. Over the last four quarters, the company has surpassed consensus EPS estimates three times.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Hims & Hers Health, Inc. (HIMS): Free Stock Analysis Report

GE HealthCare Technologies Inc. (GEHC): Free stock analysis report

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Zacks Investment Research

Vaseline3 weeks ago

0 4 minutes read

Vaseline

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