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Raven (RAVN) Q4 Earnings: Is a Beat in Store for the Stock?

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Industrial goods manufacturer Raven Industries, Inc. is scheduled to report fourth-quarter fiscal 2018 results after market close on Mar 6. Last quarter, the company delivered a positive earnings surprise of 57.1%. Raven beat earnings estimates thrice in a row in the trailing four quarters, with a positive earnings surprise of 25.8%.

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

Key Factors to Consider

Raven anticipates exceeding prior-year sales and adjusted operating income in fiscal 2018. In applied technology, the company is increasing its market share through technological advancements. Through sustained funding of key R&D projects over the last few years, it introduced two significant new products — Hawkeye nozzle control system and next-generation rate control system. These products are getting favorable customer feedback, generating strong demand and are likely to translate into higher revenues in the to-be-reported quarter.

Raven’s Aerostar segment continues to grow across many of its platforms, including stratospheric balloons, radar systems and aerostats. During the quarter, the division sold an advanced radar system to the U.S. government for deployment overseas, and it also advanced a number of other international pursuits. The pipeline of high-quality business opportunities for the division has improved significantly.

Additionally, Raven continues to make progress in building the market for its stratospheric technology. Its considerable advancements in balloon duration and station keeping continue to support the progress on Google's Project Loon and NASA's mission. Additionally, the company is developing new stratospheric balloon solutions for other new customers. Raven’s pipeline is much stronger now and is a leading indicator of solid sales growth in 2018.

Earnings Whispers

Our proven model conclusively shows that Raven is likely to beat earnings this quarter as it possesses 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 perfectly the case here as you will see below:

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and Zacks Consensus Estimate, is +24.00% with the former pegged at 31 cents and the latter at 25 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Raven Industries, Inc. Price and EPS Surprise

 

Raven Industries, Inc. Price and EPS Surprise | Raven Industries, Inc. Quote

Zacks Rank: Raven has a Zacks Rank #1. This increases the predictive power of ESP and makes us confident about an earnings surprise.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Dollar General Corporation (DG - Free Report) has an Earnings ESP of +1.86% and Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

ProPetro Holding Corp. (PUMP - Free Report) has an Earnings ESP of +1.79% and a Zacks Rank #3.

Red Hat, Inc. has an Earnings ESP of +2.02% and a Zacks Rank #3.

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