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Can Alarm.Com (ALRM) Spring a Surprise in Q3 Earnings?
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Alarm.Com Holdings, Inc. (ALRM - Free Report) is expected to report third-quarter 2016 results on Nov 14. Last quarter, the company posted a massive positive earnings surprise of 30.0%.
Let's see how things are shaping up for this announcement.
Factors to Consider
Alarm.Com offers cloud-based security and home automation products. By relying on cloud technology, the company significantly reduces operating costs and allows users to manage their home from anywhere. For example, users can remotely control almost anything in their home, including security systems, thermostats, light switches and even garage doors through a mobile application. The company also offers wellness and activity tracking software.
The company’s second-quarter earnings beat the Zacks Consensus Estimate by 3 cents. Also, revenues of $64.4 million were up 24% year over year. Moreover, SaaS and license revenues rose 23% year over year to $42.0 million.
The company has a differentiated product portfolio and broad dealer network. It is working toward building new service provider relationships, breaking new grounds in product innovation and achieving international reach. In sum, this will help the company to penetrate the home automation and security market, and gain share. This will also help in expanding its customer base, thereby driving results.
Alarm.Com is already poised to a vantage player in the expanding home automation industry. For the third quarter, the company expects SaaS and license revenues in the range of $43.8–$44.0 million.
However, intensifying competition and an uncertain macro environment could impact results in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Alarm.Com will beat on earnings this quarter. That 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 are at 10 cents. Hence, the Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Alarm.Com’s Zacks Rank #3 increases the predictive power of ESP. But a 0.00% ESP 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.
vTv Therapeutics Inc. (VTVT - Free Report) , with an Earnings ESP of +335.0% and a Zacks Rank #2.
Fortress Transportation and Infrastructure Investors LLC (FTAI - Free Report) , with an Earnings ESP of +100.0% and a Zacks Rank #2.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
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Can Alarm.Com (ALRM) Spring a Surprise in Q3 Earnings?
Alarm.Com Holdings, Inc. (ALRM - Free Report) is expected to report third-quarter 2016 results on Nov 14. Last quarter, the company posted a massive positive earnings surprise of 30.0%.
Let's see how things are shaping up for this announcement.
Factors to Consider
Alarm.Com offers cloud-based security and home automation products. By relying on cloud technology, the company significantly reduces operating costs and allows users to manage their home from anywhere. For example, users can remotely control almost anything in their home, including security systems, thermostats, light switches and even garage doors through a mobile application. The company also offers wellness and activity tracking software.
The company’s second-quarter earnings beat the Zacks Consensus Estimate by 3 cents. Also, revenues of $64.4 million were up 24% year over year. Moreover, SaaS and license revenues rose 23% year over year to $42.0 million.
The company has a differentiated product portfolio and broad dealer network. It is working toward building new service provider relationships, breaking new grounds in product innovation and achieving international reach. In sum, this will help the company to penetrate the home automation and security market, and gain share. This will also help in expanding its customer base, thereby driving results.
Alarm.Com is already poised to a vantage player in the expanding home automation industry. For the third quarter, the company expects SaaS and license revenues in the range of $43.8–$44.0 million.
However, intensifying competition and an uncertain macro environment could impact results in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Alarm.Com will beat on earnings this quarter. That 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 are at 10 cents. Hence, the Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Alarm.Com’s Zacks Rank #3 increases the predictive power of ESP. But a 0.00% ESP 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.
ALARM.COM HLDGS Price and EPS Surprise
ALARM.COM HLDGS Price and EPS Surprise | ALARM.COM HLDGS Quote
Stocks to Consider
You could consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank:
SITO Mobile, Ltd. , with an Earnings ESP of +100.0% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
vTv Therapeutics Inc. (VTVT - Free Report) , with an Earnings ESP of +335.0% and a Zacks Rank #2.
Fortress Transportation and Infrastructure Investors LLC (FTAI - Free Report) , with an Earnings ESP of +100.0% and a Zacks Rank #2.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>