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Can Alarm.Com (ALRM) Spring a Surprise in Q4 Earnings?
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Alarm.Com Holdings, Inc. (ALRM - Free Report) is expected to report fourth-quarter 2016 results on Feb 23. Last quarter, the company posted a massive positive earnings surprise of 60.0%.
Let's see how things are shaping up for this announcement.
Talking about the price performance, over the past one year, shares of Alarm.Com outperformed the Zacks categorized Security and Safety services industry. While the industry gained 23.77%, the stock returned 72.61%.
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 third-quarter earnings beat the Zacks Consensus Estimate by 6 cents. Also, revenues of $67.8 million were up 26% year over year. Moreover, SaaS and license revenues rose 23% year over year to $44.6 million.
The company has a differentiated product portfolio and broad dealer network. It is working toward building new service provider relationships, breaking new ground 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 fourth quarter, the company expects SaaS and license revenues in the range of $45.8–$46.1 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 12 cents. Hence, the Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with ourEarnings 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.
Trinseo S.A. (TSE - Free Report) , with an Earnings ESP of +5.30% and a Zacks Rank #2.
Jack in the Box Inc. (JACK - Free Report) , with an Earnings ESP of +2.42% and a Zacks Rank #2.
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In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
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Can Alarm.Com (ALRM) Spring a Surprise in Q4 Earnings?
Alarm.Com Holdings, Inc. (ALRM - Free Report) is expected to report fourth-quarter 2016 results on Feb 23. Last quarter, the company posted a massive positive earnings surprise of 60.0%.
Let's see how things are shaping up for this announcement.
Talking about the price performance, over the past one year, shares of Alarm.Com outperformed the Zacks categorized Security and Safety services industry. While the industry gained 23.77%, the stock returned 72.61%.
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 third-quarter earnings beat the Zacks Consensus Estimate by 6 cents. Also, revenues of $67.8 million were up 26% year over year. Moreover, SaaS and license revenues rose 23% year over year to $44.6 million.
The company has a differentiated product portfolio and broad dealer network. It is working toward building new service provider relationships, breaking new ground 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 fourth quarter, the company expects SaaS and license revenues in the range of $45.8–$46.1 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 12 cents. Hence, the Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with ourEarnings 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 Holdings, Inc. Price and EPS Surprise
Alarm.com Holdings, Inc. Price and EPS Surprise | Alarm.com Holdings, Inc. Quote
Stocks to Consider
You could consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank:
WPX Energy, Inc. , with an Earnings ESP of +11.76% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Trinseo S.A. (TSE - Free Report) , with an Earnings ESP of +5.30% and a Zacks Rank #2.
Jack in the Box Inc. (JACK - Free Report) , with an Earnings ESP of +2.42% and a Zacks Rank #2.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>