Vapotherm (VAPO) reports second-quarter loss, highest revenue estimates

Vapotherm (VAPO) came out with a quarterly loss of $0.67 per share versus the Zacks Consensus Estimate of a loss of $0.64. That compares to a loss of $0.35 per share a year earlier. These numbers were adjusted for one-time items.

This quarterly report showed an earnings surprise of -4.69%. A quarter ago, it was expected that this health technology company would post a loss of $0.41 per share when it actually produced a loss of $0.40, delivering a surprise of 2.44%.

The company has topped consensus earnings per share estimates three times over the last four quarters.

Vapotherm, which belongs to the Zacks Medical – Products industry, posted revenues of $20.63 million for the quarter ended June 2021, surpassing the Zacks Consensus Estimate by 13.45%. This compares to revenues of $35.15 million in the prior year. The company has surpassed consensus revenue estimates four times over the last four quarters.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.

Vapotherm shares have lost about 5.5% since the beginning of the year, while the S&P 500 has gained 18.1%.

What’s next for Vapotherm?

While Vapotherm has underperformed the market this year, investors are wondering: what’s next for this stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings report, the estimate revision trend for Vapotherm was mixed. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. As such, the stock is expected to perform in line with the market in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is -$0.66 on revenue of $16.81M for the coming quarter and -$2.32 on revenue of $86.08M for the current fiscal year.

Investors should be aware that the outlook for an industry can also have a significant impact on stock prices. In terms of the Zacks Industry Rank, the Medical – Products industry is currently in the bottom 24% of the 250+ Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

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