The Liberty Media Group is scheduled to report second-quarter 2016 results on Aug 5, before the opening bell.
Last quarter, the company posted a negative earnings surprise of 40.00%. Moreover, the company’s earnings lagged the Zacks Consensus Estimate in three of the previous four quarters, with an average miss of 47.73%. Let’s see how things are shaping up for this announcement.
Factors at Play
Liberty Media is steadily restructuring its operations with an aim to control several subscription-based businesses. The company’s diversified investments in cable MSOs, satellite radio broadcasters and live concert operators should enhance its long-term growth prospects. The company holds a majority stake in satellite radio broadcaster, SIRIUS XM Radio, 27% in Live Nation Entertainment, the largest concert promoter and ticketing company in the U.S., and 27.3% in Charter Communications Inc. (CHTR - Free Report) , the second largest cable MSO in the U.S. after Comcast Corp. (CMCSA - Free Report) .
However, stiff competition from pay-TV operators and the company’s susceptibility to rapid technological changes are dampeners. Liberty Media's high dependence on subscription-based services, which are vulnerable to economic fluctuations, might dent profits. The multi-channel video market in the U.S. is also saturated. The company also has a highly leveraged balance sheet, which is a major concern.
Earnings Whispers
Our proven model does not conclusively show that Liberty Media is likely to beat the Zacks Consensus Estimate this quarter. This 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. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Liberty Media has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 47 cents.
Zacks Rank: Liberty Media has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stock to Consider
Here is a company to consider instead as our model shows that it has the right combination of elements to post an earnings beat this quarter.
CenturyLink Inc. , with an earnings ESP of +5.09% and a Zacks Rank #2.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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The Liberty Media Group is scheduled to report second-quarter 2016 results on Aug 5, before the opening bell.
Last quarter, the company posted a negative earnings surprise of 40.00%. Moreover, the company’s earnings lagged the Zacks Consensus Estimate in three of the previous four quarters, with an average miss of 47.73%. Let’s see how things are shaping up for this announcement.
Factors at Play
Liberty Media is steadily restructuring its operations with an aim to control several subscription-based businesses. The company’s diversified investments in cable MSOs, satellite radio broadcasters and live concert operators should enhance its long-term growth prospects. The company holds a majority stake in satellite radio broadcaster, SIRIUS XM Radio, 27% in Live Nation Entertainment, the largest concert promoter and ticketing company in the U.S., and 27.3% in Charter Communications Inc. (CHTR - Free Report) , the second largest cable MSO in the U.S. after Comcast Corp. (CMCSA - Free Report) .
However, stiff competition from pay-TV operators and the company’s susceptibility to rapid technological changes are dampeners. Liberty Media's high dependence on subscription-based services, which are vulnerable to economic fluctuations, might dent profits. The multi-channel video market in the U.S. is also saturated. The company also has a highly leveraged balance sheet, which is a major concern.
Earnings Whispers
Our proven model does not conclusively show that Liberty Media is likely to beat the Zacks Consensus Estimate this quarter. This 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. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Liberty Media has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 47 cents.
Zacks Rank: Liberty Media has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stock to Consider
Here is a company to consider instead as our model shows that it has the right combination of elements to post an earnings beat this quarter.
CenturyLink Inc. , with an earnings ESP of +5.09% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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