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What's in the Offing for CooTek (CTK) This Earnings Season?

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CooTek (Cayman) Inc. (CTK - Free Report) is scheduled to release third-quarter 2020 results on Nov 16.

The company expects quarterly revenues of around $112 million. The Zacks Consensus Estimate for the same is also pegged at $112.2 million, calling for growth of a whopping 259%, year on year.

The Zacks Consensus Estimate for the bottom line is pinned at a loss per share of 25 cents, suggesting a wider loss than the year-ago quarter’s 24 cents.

The company’s earnings surpassed the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 63.5%.

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

Factors at Play

CooTek’s sustained focus on rolling out the latest mobile applications is likely to have helped it add new customers, thereby bringing in incremental revenues during the September-end quarter. Its high customer retention ratio is anticipated to have boosted top-line growth.

The company’s quarterly performance is likely to have benefited from the accelerated monetization of its online literature and casual games businesses. Moreover, increased revenue mix of the in-house ad network is expected to have supported revenue and margin growth during the to-be-reported quarter.

Nonetheless, the company’s bottom-line performance might have been hurt by higher sales and marketing (S&M) expenses mainly due to increased investments in user acquisitions.

What Our Model Says

Our proven model does not predict an earnings beat for CooTek this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

CooTek currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Spectrum Brands Holdings Inc. (SPB - Free Report) has an Earnings ESP of +9.24% and holds a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIACorporation (NVDA - Free Report) has an Earnings ESP of +1.75% and carries a Zacks Rank of 2, currently.

Workday Inc. (WDAY - Free Report) has an Earnings ESP of +3.73% and currently holds a Zacks Rank of 3.

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