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Aaron's (AAN) Q3 Earnings: What's in Store for the Stock?
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Aaron's, Inc. (AAN - Free Report) is slated to report third-quarter 2016 results on Oct 28. Last quarter, the company delivered a positive earnings surprise of 3.5% despite underperforming the Zacks Consensus Estimate by an average of 3.9% over the trailing four quarters. Let’s see how things are shaping up for this announcement.
Aaron’s remains focused on developing its omnichannel network and enhancing its eCommerce trends to boost revenues. Further, management remains impressed with consistent growth witnessed at its Progressive segment, which makes it reasonably confident of the performance of this segment in the third quarter as well. Additionally, Aaron’s remains optimistic of maximizing EBITDA, expanding business and augmenting shareholder value – given its robust balance sheet.
While these factors bode well, the company’s Core business remains challenging. In fact, management had also lowered its 2016 outlook in the last earnings release, considering its ongoing business trends and sale of HomeSmart assets – making us somewhat cautious of the upcoming results. Thus, we would prefer to wait and see what’s in store for Aaron’s in the quarter to be reported.
Earnings Whispers
Our proven model does not conclusively show that Aaron's is likely to beat earnings 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: Aaron's currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 47 cents.
Zacks Rank: Aaron's Zacks Rank #3 (Hold) increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
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:
Caterpillar Inc. (CAT - Free Report) , scheduled to release earnings on Oct 25, 2016, currently has an Earnings ESP of +1.33% and a Zacks Rank #2 (Buy).
Amazon.com, Inc. (AMZN - Free Report) , slated to release earnings on Oct 27, 2016, currently has an Earnings ESP of +6.98% and a Zacks Rank #1.
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Aaron's (AAN) Q3 Earnings: What's in Store for the Stock?
Aaron's, Inc. (AAN - Free Report) is slated to report third-quarter 2016 results on Oct 28. Last quarter, the company delivered a positive earnings surprise of 3.5% despite underperforming the Zacks Consensus Estimate by an average of 3.9% over the trailing four quarters. Let’s see how things are shaping up for this announcement.
AARONS INC Price and EPS Surprise
AARONS INC Price and EPS Surprise | AARONS INC Quote
Factors Influencing This Quarter
Aaron’s remains focused on developing its omnichannel network and enhancing its eCommerce trends to boost revenues. Further, management remains impressed with consistent growth witnessed at its Progressive segment, which makes it reasonably confident of the performance of this segment in the third quarter as well. Additionally, Aaron’s remains optimistic of maximizing EBITDA, expanding business and augmenting shareholder value – given its robust balance sheet.
While these factors bode well, the company’s Core business remains challenging. In fact, management had also lowered its 2016 outlook in the last earnings release, considering its ongoing business trends and sale of HomeSmart assets – making us somewhat cautious of the upcoming results. Thus, we would prefer to wait and see what’s in store for Aaron’s in the quarter to be reported.
Earnings Whispers
Our proven model does not conclusively show that Aaron's is likely to beat earnings 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: Aaron's currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 47 cents.
Zacks Rank: Aaron's Zacks Rank #3 (Hold) increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
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:
Caterpillar Inc. (CAT - Free Report) , scheduled to release earnings on Oct 25, 2016, currently has an Earnings ESP of +1.33% and a Zacks Rank #2 (Buy).
Big 5 Sporting Goods Corp. (BGFV - Free Report) , expected to report earnings on Oct 25, 2016, currently has an Earnings ESP of +3.33% and a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
Amazon.com, Inc. (AMZN - Free Report) , slated to release earnings on Oct 27, 2016, currently has an Earnings ESP of +6.98% and a Zacks Rank #1.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>