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Will CA Inc. (CA) Pull Off a Surprise in Q1 Earnings?
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CA Inc. (CA - Free Report) is set to report first-quarter fiscal 2017 results on Jul 27. Last quarter, the company posted a positive earnings surprise of 7.69%. Let us see how things are shaping up for this announcement.
Factors at Play
CA reported better-than-expected fourth-quarter results. The year-over-year revenue comparison was however unfavorable. CA’s major revenue generating segments were adversely affected during the quarter, primarily due to unfavorable foreign exchange impact.
Furthermore, we believe that the increased efficiency offered by the wide range of products will attract customers across sectors, lending stability to the business model. We are positive about CA’s increased cloud exposure. A modest cash position and share repurchase also appear encouraging.
CA has also adopted a “go to market” sales strategy. This brings together all the commercial functions including sales, marketing, brand management, pricing and consumer insight, which in turn helps the company to improve its bottom line, by integrating the marketing functions in order to lower cost.
On the other hand, increasing competition from Oracle (ORCL - Free Report) , International Business Machines and HP Inc. and exposure to Europe remain the near-term headwinds.
Our proven model does not conclusively show that CA will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 56 cents. Hence, the difference is 0.00%.
Zacks Rank: CA’s Zacks Rank #3 when combined with a 0.00% ESP 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 momentum.
Stocks to Consider
Here are a couple of companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:
Garmin Ltd. (GRMN - Free Report) with an Earnings ESP of +4.48% and a Zacks Rank #3
Amazon.com, Inc. (AMZN - Free Report) with Earnings ESP of +37.72% and a Zacks Rank #3
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Will CA Inc. (CA) Pull Off a Surprise in Q1 Earnings?
CA Inc. (CA - Free Report) is set to report first-quarter fiscal 2017 results on Jul 27. Last quarter, the company posted a positive earnings surprise of 7.69%. Let us see how things are shaping up for this announcement.
Factors at Play
CA reported better-than-expected fourth-quarter results. The year-over-year revenue comparison was however unfavorable. CA’s major revenue generating segments were adversely affected during the quarter, primarily due to unfavorable foreign exchange impact.
Furthermore, we believe that the increased efficiency offered by the wide range of products will attract customers across sectors, lending stability to the business model. We are positive about CA’s increased cloud exposure. A modest cash position and share repurchase also appear encouraging.
CA has also adopted a “go to market” sales strategy. This brings together all the commercial functions including sales, marketing, brand management, pricing and consumer insight, which in turn helps the company to improve its bottom line, by integrating the marketing functions in order to lower cost.
On the other hand, increasing competition from Oracle (ORCL - Free Report) , International Business Machines and HP Inc. and exposure to Europe remain the near-term headwinds.
CA INC Price and EPS Surprise
CA INC Price and EPS Surprise | CA INC Quote
Earnings Whispers?
Our proven model does not conclusively show that CA will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 56 cents. Hence, the difference is 0.00%.
Zacks Rank: CA’s Zacks Rank #3 when combined with a 0.00% ESP 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 momentum.
Stocks to Consider
Here are a couple of companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:
Garmin Ltd. (GRMN - Free Report) with an Earnings ESP of +4.48% and a Zacks Rank #3
Amazon.com, Inc. (AMZN - Free Report) with Earnings ESP of +37.72% and a Zacks Rank #3
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>