IRHYTHM TECH (IRTC) reports third-quarter loss, beats revenue estimates

IRHYTHM TECH (IRTC) came out with a quarterly loss of $0.43 per share versus the Zacks Consensus Estimate of a loss of $0.44. This compares to a loss of $0.29 per share a year ago. These figures are adjusted for one-time items.

This quarterly report represents an earnings surprise of 2.27%. A quarter ago, it was expected that the company would post a loss of $0.42 per share when it actually made a loss of $0.51, representing a surprise of -21.43%.

Over the last four quarters, the company has beaten consensus earnings per share estimates only once.

IRHYTHM TECH, which belongs to the Zacks Medical Info Systems industry, posted revenues of $38.10 million for the quarter ended September 2018, surpassing the Zacks Consensus Estimate by 7.61%. This compares to year-ago revenues of $25.04 million. The company has surpassed the consensus revenue estimate four times over the last four quarters.

The sustainability of current share price movements based on recently released data and future earnings expectations will depend primarily on management’s commentary following the earnings conference call.

IRHYTHM TECH shares are up about 36.5% year to date, while the S&P 500 is down -1.2%.

What’s next for IRHYTHM TECH?

While IRHYTHM TECH stock has outperformed the market so far this year, investors are wondering: what’s next for this stock?

There are no easy answers to this key question, but one reliable indicator that can help investors address this is the company’s earnings outlook. This includes not only the current consensus earnings expectations for the coming quarter(s), but also how those expectations have changed recently.

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 the earnings release, the estimate revision trend for IRHYTHM TECH was favorable. 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 #2 (Buy) for the stock. The stock is expected to outperform the market in the near future. 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 upcoming quarters and current fiscal year change in the coming days. The current consensus EPS estimate is -$0.46 on $39.03 million in revenue for the coming quarter and -$1.91 on $140.85 million in revenue for the current fiscal year.

Investors should be aware that the industry outlook can also have a significant impact on stock performance. In terms of the Zacks Industry Rank, Medical Info Systems currently ranks in the bottom 30% 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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