Boston, MA 08/06/2014 (wallstreetpr) – Innovative energy-based technologies provider for the medical technology sector Lumenis Ltd (LMNS) is in the early stage of a turnaround as the financial results for the second quarter has further confirmed this view, opined financial and investment advisor Goldman Sachs Group Inc (NYSE:GS). A few days back, the company had announced its results, and the investors’ reacted favorably by lifting its stock 6.6% on Tuesday’s regular trading session.
Implications Of 2Q Results
The brokerage had revised its model to reflect better sales from Aesthetics partly compensated by weaker Ophthalmology recovery, assumptions around geographic mix, and the pattern of discretionary spending. Analyst David Roman said that the second quarter results have only confirmed its opinion that the company is in the initial stages of a turnaround.
Goldman Sachs Group Inc (NYSE:GS) said that the company’s management team was focused, and its new product launches drove a sustained revenue uptick in the HSD percentage with the potential EBIT leverage in the mid-to-high teens. As a result, it was estimating 2.6 percentage points of margin expansion in EBIT by 2017 compared to the levels of 2013.
Comments On 2Q Results
Analyst David Roman said that Lumenis Ltd (NASDAQ:LMNS) revenue of $72.5 million indicated a year-over-year and quarter-over-quarter growth of 9.3% and 10.2% respectively. Aside from this, revenue topped his estimations by 4% driven by improvement in sales execution and a range of new product launches. Its adjusted earnings per share of 13 cents were also ahead of the analyst’s estimation of 10 cents a share and the Street expectations of 11 cents a share.
The brokerage viewed that the company’s gross margin of 54% topped its predictions by 40 basis points, which, in turn, helped to fuel EBIT margins by 1.3 percentage points ahead of its expectations.
Rating of Stock
Goldman Sachs Group Inc (NYSE:GS) had maintained its rating of Buy on the shares of Lumenis Ltd (NASDAQ:LMNS) and had a one-year price target of $17 based on the 2015 estimated enterprise value, sales and discounted cash flow. The brokerage believes that the shares of the company continued to trade at a significant discount compared to its peers of comparable growth prospects.