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What's In Store for MaxPoint (MXPT) this Earnings Season?

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Internet software firm MaxPoint Interactive, Inc. is scheduled to report fourth-quarter 2016 results after the closing bell on Mar 8.

The company, which went public in early Mar 2015, recorded a healthy positive earnings surprise of 42.86% in the last reported quarter. MaxPoint has beaten earnings estimates thrice in the last four quarters with an average positive surprise of 20.99%.

Let’s see how things are shaping up for this announcement.

Key Factors in the Fourth Quarter

MaxPoint’s proprietary Digital Zip technology and the MaxPoint Intelligence Platform give it a distinctive advantage in a highly competitive landscape, setting it apart from its peers. These solutions help in drawing sales by predicting the most likely local buyers of a particular product at a specific retail location and then targeting cross-channel digital marketing programs at these buyers.

MaxPoint’s hyper-local platform along with customized store-level sales and inventory system is likely to augment digital advertising and campaign measurement capabilities. In addition, ongoing signals and alerts including store-level attributes, stock data and exception reports to the consumer packaged goods (CPG) companies are likely to result in actionable inputs to further improve store profitability.

During the quarter, MaxPoint entered into a partnership with point-of-sale analytics company Retail Solutions Inc. to incorporate hyperlocal digital advertising to store-level intelligence. Per this partnership, the company will be able to dynamically target, optimize and measure the sales impact and ROI (return on investment) from digital advertising programs run on behalf of CPG companies and retailers. This deal is likely to impact the company’s revenues in the to-be-reported quarter.

Despite the growing demands for digital advertising services and cloud-based software service, MaxPoint functions in a highly competitive and fragmented industry. Thus, the company has to be on par with its competitors, which may call for higher expenses relating to research and development. These expenses are expected to shrink the company’s profits.

Earnings Whispers

Our proven model does not conclusively show that MaxPoint is likely to beat earnings this quarter as it lacks the key components. 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. This is not the case here as you will see below:

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently 0.00%.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: MaxPoint’s Zacks Rank #3 increases the predictive power of the ESP. However, an Earnings ESP of 0.00% makes a surprise prediction difficult.

Note that the Sell-rated stocks (#4 or #5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

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 this quarter:

Spectrum Pharmaceuticals, Inc. ,  with an Earnings ESP of +15.39% and a Zacks Rank #3.

Tailored Brands, Inc. , with an Earnings ESP of +9.09% and a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.

Camping World Holdings, Inc. (CWH - Free Report) , with an Earnings ESP of +22.22% and a Zacks Rank #2.   

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