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The technology stocks’ fourth-quarter 2020 results are likely to reflect an uptick in demand for tech-ridden digitization solutions, courtesy of the rising work-from-home and learn-from-home trends amid the pandemic.
Ongoing momentum in cloud-computing solutions and Internet services, increasing demand for high-compute capabilities’ processors, and growing proliferation of advanced technologies are expected to have benefited the tech companies.
Further, a rebound in the automotive space, accelerated deployment of 5G and strong PC market worldwide might have favored the technology sector in the quarter under review.
Moreover, encouraging PC shipments highlight the need for advanced processors in sleek enterprise laptops, which is expected to have contributed to the performance of semiconductor companies in the fourth quarter.
Also, the rapid adoption of AI, Machine Learning (“ML”), cloud products and service, analytics, IoT, AR/VR, which are bolstering the adoption of cutting-edge semiconductors, might have significantly benefited the tech companies in the quarter to be reported.
Markedly, Texas Instruments’ fourth-quarter 2020 results gained from uptrend in personal electronics, owing to the rising demand for electronic gadgets for remote working and entertainment during this pandemic and recovery in the automotive sector.
Additionally, solid uptick in video conferencing as a result of the current work-from-home trend is expected to have acted as a tailwind. Besides, strengthening user penetration for online payment services is anticipated to have been encouraging for tech companies offering digital payment solutions.
Growing clout of streaming services for entertainment, rising user penetration on social media platforms and online gaming craze are expected to have been other positives. Markedly. Snap’s fourth-quarter 2020 top-line growth benefited from increasing ARPU and user base growth.
Nevertheless, a slowdown in IT spending, and weakness across small and medium-sized businesses, due to disruptions caused by COVID-19, are likely to have weighed on the tech companies’ performance in the fourth quarter.
The after-effects are already apparent and can be ascertained from fourth-quarter 2020 results from Teradata (TDC - Free Report) . Although higher mix of recurring revenues aided performance, the company’s consulting business continues to suffer due to coronavirus-induced headwinds.
Sneak Peek on Upcoming Releases
Given this interesting mix of factors, let’s see how the following technology stocks are poised ahead of their quarterly results slated to be reported on Feb 10.
Our quantitative model predicts an earnings beat for the company with a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) as this combination increases its chances of beating estimates.
CDW Corporation (CDW - Free Report) fourth-quarter 2020 performance is likely to have benefited from strong Public segment performance. Also, strength in the Government and Education sector is expected remained a tailwind.
Paycom Software, Inc. (PAYC - Free Report) fourth-quarter 2020 performance is likely to have gained from new business wins and the high-margin recurring revenue business. The company’s employee usage strategy, sales efforts and investments might have boosted sales growth.
Nonetheless, Paycom’s quarterly results are likely to reflect the impact of pandemic-triggered economic and business disruptions. Notably, some of the company’s businesses are directly related to the number of headcounts at its client offices.
Although Paycom carries a Zacks Rank #3, an Earnings ESP of 0.00% makes surprise prediction difficult.
SS&C Technologies Holdings, Inc. (SSNC - Free Report) fourth-quarter 2020 results are likely to reflect positive contributions from Intralinks buyout.
Additionally, ongoing momentum across its fund administration services and Singularity offering for investment accounting services, is expected to have acted as a tailwind.
However, slowdown in the global economy had compelled the company to withdraw its quarterly and 2020 guidance, and remained a headwind.
SS&C has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
SS&C Technologies Holdings, Inc. Price and EPS Surprise
The Zacks Consensus Estimate for earnings is steady over the past 30 days at $1.05 per share.
Tyler Technologies, Inc. (TYL - Free Report) fourth-quarter 2020 performance is likely to reflect gains from big-value deals in public safety and lower expenses.
However, anticipated impacts of unauthorized third-party intrusion, which affected the company’s ability to deliver licenses and services well in October (early into the fourth quarter), remained a concern.
Tyler has an Earnings ESP of 0.00% and a Zacks Rank #3.
Zillow Group, Inc. (ZG - Free Report) fourth-quarter 2020 performance is likely to have gained from higher customer traffic, robust partner retention and increasing partner demand across the company’s marketplace businesses.
Nevertheless, increased spend on product enhancements and advertising amid stiff competition might have limited margin expansion in the to-be-reported quarter.
Zillow Group has an Earnings ESP of -12.28% and a Zacks Rank #3.
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Image: Bigstock
Tech Stocks' Feb 10 Q4 Earnings Roster: CDW, PAYC, SSNC, TYL, ZG
The technology stocks’ fourth-quarter 2020 results are likely to reflect an uptick in demand for tech-ridden digitization solutions, courtesy of the rising work-from-home and learn-from-home trends amid the pandemic.
Ongoing momentum in cloud-computing solutions and Internet services, increasing demand for high-compute capabilities’ processors, and growing proliferation of advanced technologies are expected to have benefited the tech companies.
This is evident from the scintillating performance of companies in the cloud computing domain. Amazon’s (AMZN - Free Report) Amazon Web Services’ revenues surged 28% year over year to $12.7 billion. Meanwhile, Microsoft Azure revenues improved 48% at constant currency, driven by robust growth in consumption-based business.
Further, a rebound in the automotive space, accelerated deployment of 5G and strong PC market worldwide might have favored the technology sector in the quarter under review.
Moreover, encouraging PC shipments highlight the need for advanced processors in sleek enterprise laptops, which is expected to have contributed to the performance of semiconductor companies in the fourth quarter.
Also, the rapid adoption of AI, Machine Learning (“ML”), cloud products and service, analytics, IoT, AR/VR, which are bolstering the adoption of cutting-edge semiconductors, might have significantly benefited the tech companies in the quarter to be reported.
Markedly, Texas Instruments’ fourth-quarter 2020 results gained from uptrend in personal electronics, owing to the rising demand for electronic gadgets for remote working and entertainment during this pandemic and recovery in the automotive sector.
Additionally, solid uptick in video conferencing as a result of the current work-from-home trend is expected to have acted as a tailwind. Besides, strengthening user penetration for online payment services is anticipated to have been encouraging for tech companies offering digital payment solutions.
Growing clout of streaming services for entertainment, rising user penetration on social media platforms and online gaming craze are expected to have been other positives. Markedly. Snap’s fourth-quarter 2020 top-line growth benefited from increasing ARPU and user base growth.
Nevertheless, a slowdown in IT spending, and weakness across small and medium-sized businesses, due to disruptions caused by COVID-19, are likely to have weighed on the tech companies’ performance in the fourth quarter.
The after-effects are already apparent and can be ascertained from fourth-quarter 2020 results from Teradata (TDC - Free Report) . Although higher mix of recurring revenues aided performance, the company’s consulting business continues to suffer due to coronavirus-induced headwinds.
Sneak Peek on Upcoming Releases
Given this interesting mix of factors, let’s see how the following technology stocks are poised ahead of their quarterly results slated to be reported on Feb 10.
Our quantitative model predicts an earnings beat for the company with a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) as this combination increases its chances of beating estimates.
CDW Corporation (CDW - Free Report) fourth-quarter 2020 performance is likely to have benefited from strong Public segment performance. Also, strength in the Government and Education sector is expected remained a tailwind.
Our proven model predicts an earnings beat for CDW Corp this time around. The company has an Earnings ESP of +3.40% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
CDW Corporation Price and EPS Surprise
CDW Corporation price-eps-surprise | CDW Corporation Quote
The Zacks Consensus Estimate for earnings has been revised upward by 2 cents over the past 30 days to $1.53 per share. (Read More: CDW Corp to Report Q4 Earnings: What's in the Cards?)
Paycom Software, Inc. (PAYC - Free Report) fourth-quarter 2020 performance is likely to have gained from new business wins and the high-margin recurring revenue business. The company’s employee usage strategy, sales efforts and investments might have boosted sales growth.
Nonetheless, Paycom’s quarterly results are likely to reflect the impact of pandemic-triggered economic and business disruptions. Notably, some of the company’s businesses are directly related to the number of headcounts at its client offices.
Although Paycom carries a Zacks Rank #3, an Earnings ESP of 0.00% makes surprise prediction difficult.
Paycom Software, Inc. Price and EPS Surprise
Paycom Software, Inc. price-eps-surprise | Paycom Software, Inc. Quote
The consensus mark for earnings is steady over the past 30 days at 81 cents per share. (Read More: What's in Store for Paycom This Earnings Season?)
SS&C Technologies Holdings, Inc. (SSNC - Free Report) fourth-quarter 2020 results are likely to reflect positive contributions from Intralinks buyout.
Additionally, ongoing momentum across its fund administration services and Singularity offering for investment accounting services, is expected to have acted as a tailwind.
However, slowdown in the global economy had compelled the company to withdraw its quarterly and 2020 guidance, and remained a headwind.
SS&C has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
SS&C Technologies Holdings, Inc. Price and EPS Surprise
SS&C Technologies Holdings, Inc. price-eps-surprise | SS&C Technologies Holdings, Inc. Quote
The Zacks Consensus Estimate for earnings is steady over the past 30 days at $1.05 per share.
Tyler Technologies, Inc. (TYL - Free Report) fourth-quarter 2020 performance is likely to reflect gains from big-value deals in public safety and lower expenses.
However, anticipated impacts of unauthorized third-party intrusion, which affected the company’s ability to deliver licenses and services well in October (early into the fourth quarter), remained a concern.
Tyler has an Earnings ESP of 0.00% and a Zacks Rank #3.
Tyler Technologies, Inc. Price and EPS Surprise
Tyler Technologies, Inc. price-eps-surprise | Tyler Technologies, Inc. Quote
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.41 per share, steady over the past 30 days. (Read More: Tyler to Report Q4 Earnings: What's in the Cards?)
Zillow Group, Inc. (ZG - Free Report) fourth-quarter 2020 performance is likely to have gained from higher customer traffic, robust partner retention and increasing partner demand across the company’s marketplace businesses.
Nevertheless, increased spend on product enhancements and advertising amid stiff competition might have limited margin expansion in the to-be-reported quarter.
Zillow Group has an Earnings ESP of -12.28% and a Zacks Rank #3.
Zillow Group, Inc. Price and EPS Surprise
Zillow Group, Inc. price-eps-surprise | Zillow Group, Inc. Quote
The Zacks Consensus Estimate for earnings per share has been steady at 29 cents in the past 30 days. (Read More: Zillow Group to Report Q4 Earnings: What’s in the Offing?)
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>