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What's in Store for Horizon Pharma (HZNP) in Q1 Earnings? - Analyst Blog

Zacks Equity Research
Updated

Horizon Pharma HZNP is scheduled to report first-quarter 2015 results before the opening bell on May 8. Last quarter, the company had posted a positive earnings surprise of 17.39%. Let’s see how things are shaping up for this announcement.

Factors at Play This Quarter

Horizon Pharma’s key marketed products including Vimovo, Duexis, Actimmune and Rayos should continue to do well this quarter. Meanwhile the company’s increasing operating expenses may affect its bottom line.

The biggest news during the first quarter was when Horizon Pharma announced that it will be acquiring Hyperion Therapeutics, Inc. HPTX for around $1.1 billion ($46.00 per share) in cash. The transaction, approved by the board of both the companies, is expected to close in the second quarter of 2015. With the successful completion of the deal, Horizon Pharma will add Ravicti and Buphenyl to its portfolio, both approved for the treatment of patients suffering from urea cycle disorders. In 2014, the products jointly contributed $113.6 million to Hyperion Therapeutics’ revenues.

We expect investor focus to stay on updates on this news.

Earnings Whispers?

Our proven model does not conclusively show that Horizon Pharma is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.

Zacks ESP: The Earnings ESP for Horizon Pharma is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 22 cents per share.

Zacks Rank: Horizon Pharma carries a Zacks Rank #1 (Strong Buy). Horizon Pharma’s Zacks Rank #1 when combined with an ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Actavis plc ACT has an Earnings ESP of +0.78% and a Zacks Rank #3. The company is scheduled to release first-quarter 2015 results on May 11.

Impax Laboratories Inc. IPXL has an Earnings ESP of +15.00% and a Zacks Rank #3. The company is scheduled to release first-quarter 2015 results on May 11.
 


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IMPAX LABORATRS (IPXL): Free Stock Analysis Report
 
HORIZON PHARMA (HZNP): Free Stock Analysis Report
 
HYPERION THERAP (HPTX): Free Stock Analysis Report
 
ACTAVIS PLC (ACT): Free Stock Analysis Report
 
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Zacks Investment Research