Medical Service Stock Earnings On Nov 1: ABCO, EVHC, HWAY

We are in the second half of the Q3 earnings reporting cycle with 291 S&P 500 members (58.2% of the total index) having reported their quarterly numbers, as of Oct 28. The quarterly releases so far have reinstated hopes of this quarter recording earnings growth after five consecutive quarters of declines for the S&P 500 index.

Total earnings are up 2.2% year over year for the S&P 500 members on a beat ratio of 73.5%. Revenue growth stands at 1.3% with 57.4% beating revenue expectations.

With a significant number of earnings reports yet to be released, the ongoing week is going to prove crucial for the Q3 cycle.

As per the latest Earnings Preview, Medical is one of the 12 broader sectors among the 16 Zacks sectors which is expected to report earnings growth. The sector is likely to see 6% earnings growth on 7.3% higher revenues in the quarter.

What Awaits the Med-Service Space?

Medical Service is an integral part of the broader Medical sector which holds a lot of promise at this moment. According to a survey by KPMG, medical device companies plan to spend more than 6% of revenues on R&D/innovation, which is way above the R&D investments made by other manufacturing companies. The innovation and breakthroughs can come in the form of new products or surgical techniques or cost-effective products targeting the emerging markets.

Let’s take a look at the major medical service stocks slated to release their third-quarter numbers on Nov 1:

The Advisory Board Company (NASDAQ:ABCO) : Headquartered in Washington D.C., Advisory Board Company is a global research, consulting and technology firm helping hospital and health system leaders improve the quality and efficiency of patient care. They offer strategic guidance, actionable insights, and comprehensive implementation and management services.

However, our proven model does not conclusively show an earnings beat for the company. Advisory Board currently has a Zacks Rank #4 (Sell) and an earnings ESP of 0.00%. Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Envision Healthcare Holdings, Inc. (NYSE:EVHC) : Envision Healthcare Holdings or Envision is based in Colorado. The company offers hospital-based physician services, emergent and non-emergent medical transportation and population health management.

We cannot conclusively predict an earnings beat for Envision as it also has a Zacks Rank #4 and an earnings ESP of 0.00%. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Healthways, Inc. (NASDAQ:HWAY) : Based in Franklin, TN, Healthways provides Network delivered solutions and Population Health management services aimed at improving people’s lifestyle, overall health and productivity while reducing health-related costs.

As per our model, a stock needs to have both a positive earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. Thus, we cannot conclusively predict a beat for this company as it has an earnings ESP of 0.00% and a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

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