Quick Win by the Algorithm
“On a non-GAAP basis adjusted for impacts from U.S. Tax Reform, Heska earned $0.63 per diluted share in the period, up 37.0% over the prior year period; for the full year, Heska earned $2.07 per diluted share, up 44.8% over the prior year period and in excess of our full year target. We outperformed in our key blood diagnostics lines and we exceeded our profitability targets with record gross margins, operating margins, and earnings”
– Kevin Wilson, Heska’s Chief Executive Officer and President
Over the past two weeks Heska Corporation’s stock price jumped from $61 to $77 per share, outperforming the market by more than 23%. So what is the driver behind that growth and what happened during those 14 days? The reason is that the company released the results for Q4 2017 with the following highlights:
- Net revenue Q4 down 8.9% to $36 million; FY down 0.6% to $129.3 million
- Consolidated gross margins in Q4 rose 5.4% to 46.0%; FY increased 3.6% to 45.0%
- Operating margins in Q4 rose 3.2% to 19.7%; FY increased 1.4% to 14.1%
- Cash flow from operations in 2017 was $10.4 million, up 77.8% from $5.9 million in 2016
In the context of the above, one can see that despite that the company could be considered as stable in terms of its revenue performance, while significantly improving its gross and operating margins showing the capability of the management team to effectively utilize the company’s resources. It is crucial to mention that the company’s product for Core Companion Animal’s point of care laboratory diagnostics continues to be Heska’s key growth engine. That said, during the fourth quarter and the full year, Heska gained market share with strong Reset subscription wins, ending 2017 with the most point of care diagnostics customers in its history. This is Heska’s highest margin opportunity and it is expected to continue its multi-year growth trend in 2018. As a result, investors saw cash flow from operations that increased by 77.8% representing the company’s unique performance boost for 2018. The latest Yahoo Finance data supports that positive outlook and shows that 4 out of 8 analysts took the buy position with regards to Heska’s stock.
[Source: Yahoo Finance]
On February 25th, 2018, I Know First issued a bullish 14 days forecast for Heska Corporation (NASDAQ: HSKA). The forecast illustrated a signal of 13.42 and a predictability of 0.26. In accordance with the forecast, HSKA’s stock returned 26.80% over this period, highlighting the accuracy of the prediction produced by the I Know First algorithm.
Current I Know First subscribers received this bullish HSKA forecast on February 25th, 2018.
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How to read the I Know First Forecast
Heska Corporation (NASDAQ: HSKA) manufactures, sells, and markets veterinary diagnostic and specialty products for canine and feline healthcare markets in the United States, Canada, Europe, and internationally. The company’s Core Companion Animal Health segment offers Element DC and DRI-CHEM 7000 veterinary chemistry analyzers for blood chemistry and electrolyte analysis; HT5 and HEMATRUE veterinary hematology analyzers to measure blood cell and platelet count, and hemoglobin levels; Element POC blood gas and electrolyte analyzers; COAG veterinary analyzers; Element i immunodiagnostic analyzers; and IV infusion pumps. This segment also provides veterinary imaging instruments and services, such as digital radiography solutions and ultrasound systems, as well as sells mobile digital radiography products; Cloudbank, a Web-based image storage solution; ViewCloud, a picture archival and communications system for Cloudbank; point-of-care heartworm diagnostic test products for dogs and cats; TRI-HEART Plus chewable tablets for the treatment of canine heartworm infection, and treatment and control of ascarid and hookworm infections; and allergy products and services, including ALLERCEPT definitive allergen panels, and therapy shots or drops. Its Other Vaccines, Pharmaceuticals and Products segment offers bovine vaccines primarily under the Titanium and MasterGuard brands; biological and pharmaceutical products for other animal health companies; and various turnkey services comprising research, licensing, production, labeling, and packaging, as well as provides validation support and distribution services. The company sells its products to veterinarians through a field organization, a telephone sales force, and third-party distributors; and trade shows, print advertising, and other distribution relationships. The company was formerly known as Paravax, Inc. and changed its name to Heska Corporation in 1995. Heska Corporation was founded in 1988 and is headquartered in Loveland, Colorado.
Disclaimer
Before making any trading decisions, consult the latest forecast as the algorithm updates predictions daily. You can use the algorithm for intra-day trading. The predictability tends to become stronger with forecasts over longer time-horizons such as the 1-month, 3-month and 1-year forecasts.
This Healthcare Stock Forecast article was written by Meiru Zhong – Financial Analyst at I Know First.
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The article was written by Harry Chiang, a Financial Analyst at 
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