Why Is Surmodics (SRDX) Down 2.7% Since the Last Earnings Report?

A month has gone by since the last earnings report for Surmodics, Inc. SRDX. Shares have lost about 2.7% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

SurModics SRDX Beats Q1 Earnings & Revenues Estimates

Surmodics, Inc. SRDX reported earnings of $0.19 per share in the first-quarter of fiscal 2017 (ended Dec 31, 2016), surpassing the Zacks Consensus Estimate of $0.09. Reported earnings were, however, lower than the year-ago figure of $0.38.

Revenues in the quarter increased 7.4% to $17.8 million. Reported revenues were also above the Zacks Consensus Estimate of $16 million.

Quarter in Detail

Surmodics reports revenues in two segments – In Vitro Diagnostics (IVD) and Medical Device.

Medical Device

In the reported quarter sales surged 12.3% to $13.8 million. The growth came from higher product sales, royalties, research, development and other revenue.

In Vitro Diagnostics (IVD)

In the reported quarter sales fell 6.8% to $4.0 million. The downside came from lower sales in several product categories as well as a decline from a significant microarray customer that had been acquired by one of the company's competitors.

Balance Sheet and Cash Flow

As of Dec 31, 2016, the company had $17.7 million of Cash and cash equivalents versus $25.0 million at the end of the sequential quarter. Surmodics generated cash from operating activities of $2.0 million in the first quarter of fiscal 2017. Capital expenditures totaled $1.5 million in the reported quarter.

Outlook

Surmodics expects fiscal 2017 earnings in the range of $0.18 to $0.33 per share as compared with prior guidance of $0.15 to $0.35 per share. Meanwhile, revenues are expected in the range of $64.0 million to $68.0 million, up from a previous range of $63.0 million to $67.0 million.
 

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.

Surmodics, Inc. Price and Consensus

 

Surmodics, Inc. Price and Consensus | Surmodics, Inc. Quote

VGM Scores

At this time, Surmodics' stock has a nice Growth Score of 'B', however its Momentum is lagging a bit with an 'C'. Following the exact same course, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.

Based on our scores, the stock is more suitable for growth investors than for value investors.

Outlook

The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.

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