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Q3 Earnings Preview for STAAR Surgical (NasdaqGM:STAA)

in EARNINGS/INVESTING IDEAS by

STAAR Surgical Company (NasdaqGM:STAA) is scheduled to report Q3 earnings results after markets close for trading on November 4, 2020.

The company is expected to report earnings of $0.09/share on revenue of $42.986 million. The consensus earnings per share (EPS) of $0.09/share is based on a poll of 6 analysts and represents a decline in eps of −27.8% over the same quarter last year, when the company reported earnings of $0.12/share.

The revenue forecast of $42.986 million based on a poll of 7 analysts implies a year-over-year (YoY) growth in revenue of 10.1%. Last year the company reported $39.055 million in revenue for the quarter.

Expected to report EPS contraction of −27.8% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $42.99 $39.05 10.1%
EPS $0.09 $0.12 −27.8%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and met expectations 1 quarter.

What are your expectations from STAAR Surgical Company for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.03 $0.03 0% Met
Q1, 2020 $0.03 $0.04 53.8% Beat
Q4, 2019 $0.10 $0.12 20.0% Beat
Q3, 2019 $0.08 $0.12 44.0% Beat
Q2, 2019 $0.10 $0.14 44.8% Beat
Q1, 2019 $0.05 $0.09 68.8% Beat
Q4, 2018 $0.02 $0.07 200.0% Beat
Q3, 2018 -$0.03 $0.07 333.3% Beat

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 July 3, 2020, the stock price reacted by falling −6.8%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 5, 2020 $59.96 $55.86 −6.8% Decline
May 6, 2020 $37.61 $37.43 −0.5% Decline
February 26, 2020 $30.43 $31.03 2.0% Increase
October 30, 2019 $28.61 $32.78 14.6% Increase

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 −2.13, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.13 implies a 1.7% chance of earnings manipulation.

Fundamentals And Technical Analysis

STAAR Surgical Company is currently trading at $73.94/share, down −0.9% for the day. The company is trading at approximately 98.1% of its 52-week high of $75.20/share. The company’s stock price is up 32.4% since the last earnings report and up 3.9% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 77.22 suggests the company is trading in technically overbought territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGM:STAA Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 453.15 and a forward P/E multiple of 271.81.

STAAR Surgical Company’s current share price also implies a price-to-book (P/B) multiple of 19.36. 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 July 3, 2020
Stock Price (Current) $73.94
P/E Ratio 453.2x
P/E Ratio (Fwd) 271.8x
Price To Sales 22.8x
Total Debt / Total Capital 0.2%
Levered Free Cash Flow $3.695 million
EV / EBITDA 425.4x

Finbox

STAAR Surgical Company is a mid-cap stock with a market capitalization of $3.417 billion and a total enterprise value of $3.308 billion. The company operates in the Healthcare sector and the Healthcare Equipment & Supplies industry.

STAAR Surgical Company, together with its subsidiaries, designs, develops, manufactures, markets, and sells implantable lenses for the eye, and delivery systems to deliver the lenses into the eye. The company provides Visian implantable collamer lenses (ICLs) to treat visual disorders, such as myopia, hyperopia, astigmatism, and presbyopia; and Hyperopic ICL, which treats far-sightedness. It also offers intraocular lenses (IOLs), including collamer material and silicone foldable IOLs, and nanoFLEX IOL that produces a clearer image, as well as preloaded injectors for use in cataract surgery. In addition, the company sells injector parts and other related instruments and devices. It markets its products to health care providers, including ophthalmic surgeons, vision centers, surgical centers, hospitals, government facilities, and distributors primarily under the STAAR, EVO Visian ICL, Evolution in Visual Freedom, Visian, Collamer, CentraFLOW, AquaPORT, nanoFLEX, nanoPOINT, and Afinity trademarks. The company sells its products directly through its sales representatives in the United States, Japan, Spain, Germany, Canada, the United Kingdom, and Singapore, as well as through independent distributors in China, Korea, India, and internationally. STAAR Surgical Company was founded in 1982 and is based in Monrovia, California.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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