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Inphi (IPHI) Gears Up for Q2 Earnings: What's in the Cards?

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Inphi Corporation is slated to report second-quarter 2020 results on Aug 4. In the last reported quarter, it delivered a negative earnings surprise of 3.1%.

The stock outperformed earnings estimates thrice and missed once in the last four quarters, with the average surprise being 7.3%.

Trend in Estimate Revision

For the second quarter, the Zacks Consensus Estimate for earnings has remained stable at 65 cents per share over the past 30 days. This indicates an increase of 85.7% from the year-ago reported figure.

The consensus mark for revenues is pegged at $150.08 million, implying an increase of 73.9% from the year-ago reported figure.

Let’s see how things have shaped up for this announcement.

Inphi Corporation Price and EPS Surprise

Inphi Corporation Price and EPS Surprise

Inphi Corporation price-eps-surprise | Inphi Corporation Quote

Factors to Note

The company reported strong first-quarter revenues. The trend is expected to have continued in the to-be-reported quarter due to strength in its products, especially Telecom and Cloud.

The company has been gaining from a data center boom, 5G wireless, artificial intelligence, metro and long-haul networks to PAM, virtual and augmented reality, as well as Internet of Things, among others, due to the pandemic.  

Markedly, the demand for bandwidth has been solid. Shift to the work-from-home concept, electronic commerce, distance learning, streaming and other remote usage activities further accelerated the demand for bandwidth upgrades.

Also, the acquisition of eSilicon is expected to have aided the top line in the quarter to be reported.

For the to-be-reported quarter, the company expects revenues in the range of $147.8-$152.0 million and GAAP gross margin to be 51.6-53.9%. Non-GAAP earnings per share are expected in the range of 62-68 cents.

However, rising competitive pressure from Maxim and Analog Devices may reflect on its upcoming results.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Inphi this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here as you will see below.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Inphi has a Zacks Rank #3.

Stocks That Warrant a Look

Here are a few stocks worth considering, as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.

AMETEK, Inc. (AME - Free Report) ) has an Earnings ESP of +3.96% and holds a Zacks Rank of 2.

GoPro, Inc. (GPRO - Free Report) has an Earnings ESP of +43.66% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

JD.com, Inc. (JD - Free Report) has an Earnings ESP of +13.79% and a Zacks Rank #1.

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