Nephros Inc. (NEPH) reports second-quarter loss, beats revenue estimates

Nephros Inc. (NEPH) came out with a quarterly loss of $0.12 per share versus the Zacks Consensus Estimate of a loss of $0.14. This compares to a loss of $0.12 per share a year ago. These figures are adjusted for one-time items.

This quarterly report represents an earnings surprise of 14.29%. A quarter ago, it was expected that the company would post a loss of $0.13 per share when in fact it made a loss of $0.20, representing a surprise of -53.85%.

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

Nephros Inc., which belongs to the Zacks Medical – Products industry, posted revenues of $2.88 million for the quarter ended June 2022, surpassing the Zacks Consensus Estimate by 6.82%. This compares to revenues of $2.27 million in the same period last year. The company has surpassed the consensus revenue estimate two 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.

Nephros Inc. shares have lost about 69.8% since the beginning of the year, while the S&P 500 has fallen by -13.5%.

What’s next for Nephros Inc.?

While Nephros Inc. has underperformed the market this year, the question that comes to investors’ minds is: what’s next for the 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 this earnings report, the estimate revision trend for Nephros Inc. is 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 upcoming quarters and current fiscal year change in the coming days. The current consensus EPS estimate is -$0.13 on $3 million in revenue for the upcoming quarter and -$0.58 on $11.09 million in revenue for the current fiscal year.

Investors should be aware that the outlook for the industry can also have a significant impact on stock performance. In terms of the Zacks Industry Rank, Medical – Products currently ranks in the bottom 41% 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.

ResMed (RMD), another company in the same industry, has not yet released its results for the quarter ended June 2022. The results are expected to be released on August 11.

The respiratory medical device maker is expected to report quarterly earnings of $1.48 per share in its upcoming report, which would represent a year-over-year change of 9.6%. The consensus earnings per share estimate for the quarter remained unchanged over the past 30 days.

ResMed revenue is expected to be $917.35 million, up 4.7% from the same quarter last year.

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