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Glaukos Q3 Earnings: Can NYSE:GKOS Hit Its -$0.48 EPS Target?

in EARNINGS/INVESTING IDEAS by

Glaukos Corporation (NYSE:GKOS) is scheduled to report Q3 earnings results after markets close for trading on November 5, 2020.

The company is expected to report earnings of -$0.48/share on revenue of $53.745 million. The consensus earnings per share (EPS) of -$0.48/share is based on a poll of 10 analysts and represents a decline in eps of -383.1% over the same quarter last year, when the company reported earnings of -$0.10/share.

The revenue forecast of $53.745 million based on a poll of 10 analysts implies a year-over-year (YoY) decline in revenue of −8.1%. Last year the company reported $58.509 million in revenue for the quarter.

Expected to report EPS of -$0.48/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $53.74 $58.51 −8.1%
EPS -$0.48 -$0.10 -383.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, and missed expectations 3 quarters.

What are your expectations from Glaukos Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.79 -$0.61 22.8% Beat
Q1, 2020 -$0.40 -$0.44 -9.2% Missed
Q4, 2019 -$0.18 -$0.06 −66.8% Beat
Q3, 2019 -$0.15 -$0.10 −33.3% Beat
Q2, 2019 -$0.08 -$0.11 48.2% Missed
Q1, 2019 -$0.11 -$0.04 −62.6% Beat
Q4, 2018 -$0.13 $0.04 −131.2% Beat
Q3, 2018 -$0.12 -$0.19 52.7% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −13.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $50.04 $43.45 −13.2% Decline
May 7, 2020 $40.71 $39.90 −2.0% Decline
February 27, 2020 $61.25 $43.98 −28.2% Decline
November 6, 2019 $64.65 $58.96 −8.8% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of 1.05, the model suggests that the company is likely an earnings manipulator. A value of 1.05 implies a 14.7% chance of earnings manipulation.

Fundamentals And Technical Analysis

Glaukos Corporation is currently trading at $55.85/share, down −6.2% for the day. The company is trading at approximately 79.6% of its 52-week high of $70.96/share. The company’s stock price is up 28.5% since the last earnings report and down −0.3% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 76.16 suggests the company is trading in technically overbought territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:GKOS Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −35.19 and a forward P/E multiple of −30.79.

Glaukos Corporation’s current share price also implies a price-to-book (P/B) multiple of 3.77. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $55.85
P/E Ratio −35.2x
P/E Ratio (Fwd) −30.8x
PEG Ratio 0.1
Total Debt / Total Capital 8.9%
Levered Free Cash Flow -$36.911 million
EV / EBITDA −39.3x

Finbox

Glaukos Corporation is a mid-cap stock with a market capitalization of $2.66 billion and a total enterprise value of $2.524 billion. The company operates in the Healthcare sector and the Healthcare Equipment & Supplies industry.

Glaukos Corporation, an ophthalmic medical technology and pharmaceutical company, focuses on the development and commercialization of surgical devices and sustained pharmaceutical therapies designed to treat glaucoma. It iStent and iStent inject, a micro-bypass stent for insertion in conjunction with cataract surgery for the reduction of intraocular pressure in adult patients with mild-to-moderate open-angle glaucoma. The company’s product pipeline includes iStent Infinite; iStent SA trabecular micro-bypass system, a two-stent product, which uses a different auto-injection inserter designed for use in a standalone procedure; and iDose, a targeted injectable drug delivery implant that is designed to deliver therapeutic levels of medication. The company markets its products through direct sales force in the United States and other sixteen countries, as well as through distribution partners in the United States and internationally. Glaukos Corporation was founded in 1998 and is headquartered in San Clemente, California.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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