We are in the thick of the Q3 earnings season, with almost 1085 companies set to report results this week, including 130 S&P 500 members. Notably, after five consecutive quarters of decline, earnings are finally back in the positive territory.

As per the latest Zacks Earnings Preview report, overall third-quarter earnings for S&P 500 companies are anticipated to be up 2% (compared to an earlier estimate of a rise of 1.4%) from the year-ago quarter on revenues that are estimated to increase 1.4%.

The growth is expected to be driven by solid results from the finance sector, driven by robust performance from big names like J.P. Morgan and Goldman Sachs. Finance’s impressive show is anticipated to mitigate sluggish growth from the energy, autos, transportation and technology sectors.

However, technology earnings growth is expected to remain muted due to disappointing results from Apple (AAPL). Although the iPhone maker beat the fourth-quarter 2016 earnings estimates by a penny, we note that earnings declined 15% on a year-over-year basis as revenues fell 9.9%.

We now have third-quarter results from 72.2% of the sector’s total market capitalization in the S&P 500 index. So far, total earnings are up 1.6% year over year on 1.5% higher revenues, with 87.5% beating earnings estimates and 75% beating revenue expectations. Earnings for the technology sector are now anticipated to be up 2.9% in spite of 1% lower revenues. 

Software stocks comprise an important component of the technology sector and are expected to follow the same earnings growth trajectory in the quarter. The growing adoption of cloud, Internet of Things (IoT) and Big Data analytics are the key drivers of the industry.

Here, we take a look at four software companies set to report earnings on Nov 2:

Black Knight Financial Services, Inc. is unlikely to beat third-quarter 2016 earnings estimates as it has an unfavorable combination of a Zacks Rank #3 and an Earnings ESP of 0.00%.

This is because, as per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Black Knight Financial Services offers integrated technology, workflow automation and data and analytics to the mortgage industry through its subsidiaries. We believe continuing customer win is the key catalyst for the company.

During the quarter, institutions like AmeriFirst and U.S. Bank signed contracts to use the company’s LoanSphere Loss Mitigation and LoanSphere Exchange technology solutions. However, competition and challenging macro-economic condition are the major concerns ahead of the upcoming release. 

We note that Black Knight’s results compared favorably with the Zacks Consensus Estimate in three of the last four quarters, resulting in an average positive surprise of 2.07%.

Cvent, Inc. too is unlikely to beat third-quarter 2016 earnings estimates as it has an unfavorable combination of a Zacks Rank #2 and an Earnings ESP of 0.00%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cvent operates as a cloud-based enterprise event management platform. The company provides event management software, strategic meetings management software, mobile event apps, pre and post event web surveys, ticketing software, and Cvent supplier network solutions for event and meeting planners.

While the company enjoys a steady market as an event management platform, foreign currency risk, inflation risk and interest rate risk are the three factors that can adversely affect its earnings in the third quarter. 

Notably, Cvent’s results have beaten the Zacks Consensus Estimate in three out of the trailing four quarters with an average positive surprise of 270.15%.

Software major, AVG Technologies N.V. is also expected to miss its third-quarter 2016 earnings estimates as it has an unfavorable combination of a Zacks Rank #3 and an Earnings ESP of -8.00%.

Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

AVG Technologies provides antivirus and Internet security products. The company produces and develops software for threat detection, threat prevention, and risk analysis. Following the announcement of its takeover by Avast in Jul 2016, to date, 97% of the company’s stake has been acquired by the latter.

AVG has stopped organizing earnings conference calls starting from the second quarter of 2016.

We expect this acquisition to bolster Avast’s capabilities in the anti-virus space. (Read More: Avast Announces Expiration of Subsequent Offering Period and Completion of Offer for AVG)

We note that AVG’s results have missed the Zacks Consensus Estimate in two out of the four trailing quarters with an average negative earnings surprise of 5.21%.

On the other hand, HubSpot, Inc. (HUBS Quick QuoteHUBS - Free Report) has got the odds in its favor to beat the third-quarter 2016 earnings estimates as it has a favorable combination of a Zacks Rank #3 and an earnings ESP of +13.89%.

HubSpot is a provider of inbound marketing software platform that helps companies attract visitors to their websites, convert visitors into leads, and close leads into customers.

We are encouraged by the company’s sustained focus on investing in new product developments and international expansion, which will continue to drive its top line.

Furthermore, a continuous rise in the rate measuring HubSpot’s revenue per user makes us optimistic about its top-line performance in the to-be-reported quarter.

Notably, HubSpot’s results have beaten the Zacks Consensus Estimate consistently in all the preceding four quarters with an average positive surprise of 13.95%.

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