Back to top

Image: Bigstock

Quotient's (QUOT) Q3 Earnings to Gain from Retailer iQ Growth

Read MoreHide Full Article

Quotient Technology Inc (QUOT - Free Report) is set to report third-quarter 2017 earnings on Nov 1.

Notably, the stock has returned 47.5% year to date, substantially outperforming the 27.2% rally of the industry.

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

Positive Retailer iQ Growth

Quotient is riding on the growing demand for digital coupons. The company’s Retailer iQ platform has been doing remarkably well as more retailers and brands are choosing it in order to drive their digital-marketing activities.

 

In the last quarter, revenues from Retailer iQ surged 69% year over year and represented 41% of total revenue. Promotions revenue increased 15% from the year-ago quarter.

Further, the number of retailers that have deployed Retailer iQ at POS and live at retail stores, improved from 25 in the first quarter to 27 in the second quarter. The expanding clientele that includes the likes of Dollar General (DG - Free Report) is a significant growth driver.
 

Quotient Technology Inc. Price and EPS Surprise

 

Quotient Technology Inc. Price and EPS Surprise | Quotient Technology Inc. Quote

Moreover, approximately 50 million shoppers (as compared with 40 million at the end of 2016) are now registered with Retailer iQ, which represents almost 40% of all U.S. households. The significant growth reflects increasing popularity of the Retailer iQ platform, which will continue to drive top-line growth in the soon-to-be reported quarter.

Quotient expects revenues in the range of $81-$84 million in the third-quarter.

Transaction Growth: Key Catalyst

Quotient has significant growth opportunities as the CPG brands are shifting their focus away from paper to digital. The company’s data driven media solution, Quotient Media Exchange (QMX), has also begun to deliver revenues.

In the last quarter, Quotient reported 793 million transactions, up 48% from the year-ago quarter. We expect increasing number of transactions to be the key catalyst in the near term.

Management noted that the shopper marketing business has started accelerating, which will aid the growth of media revenues. Quotient expects Crisp Mobile to further boost this growth due to its expertise in handling shopper marketing teams.

Unfavorable ESP

We believe that Quotient is unlikely to deliver a positive earnings surprise in the third quarter due to an unfavorable combination of Zacks Rank #3 (Hold) and Earnings ESP of -2.50%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

We don’t recommend Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a couple of stocks you may consider as our proven model shows they have the right combination of elements to post an earnings beat this quarter.

Kemet Corporation (KEM - Free Report) has an Earnings ESP of +7.46% and flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

HubSpot Inc (HUBS - Free Report) has an Earnings ESP of +26.53% and carries a Zacks Rank #2 (Buy).

Zacks’ Best Private Investment Ideas

While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.

Starting today, for the next month, you can 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.

Click here for Zacks' private trades >>

Published in