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3 Service Firms Poised to Trump Estimates in Q4 Earnings
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Looking back at the fourth quarter of 2021, we see that the service sector had continued gathering steam. The sector kept on rebounding from the pandemic-induced weakness, broadly aided by the recovering economy, manufacturing and non-manufacturing strength, and increased vaccination drives.
A steady economic recovery is evident from the fourth-quarter 2021 GDP number, which, according to the "advance" estimate released by the Bureau of Economic Analysis, grew at an annual rate of 6.9% compared with the increase of 2.3% in the third quarter. Economic activities in both manufacturing as well as non-manufacturing sectors have stayed in the pink in the quarter. Both the manufacturing PMI and the Services PMI measured by the Institute for Supply Management have stayed above the 50% mark for the past 20 consecutive months, indicating continued expansion.
Sector-specific factors that acted as tailwinds in the quarter are essentiality of certain services like waste management, rise in demand for risk mitigation and consulting services, increased expertise in improving operational efficiency and reducing costs, successful work-from-home models, and digital transformation.
Services pertaining to transportation & warehousing; management of companies; retail trade; wholesale trade; accommodation & food; mining; utilities; construction; health care & social assistance; finance & insurance; information technology; education & professional; and scientific & technical fields have stayed healthy in the quarter.
Stocks Poised to Beat This Season
With the existence of a number of players in the sector, finding the right business services stocks that have the potential to beat on earnings can be daunting. Our proprietary methodology, however, makes it fairly simple.
You could narrow down the list of choices by looking at stocks that have the combination of a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), and a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP is our proprietary methodology for determining stocks that have the best chances to surprise with their next earnings announcement. It is the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Our research shows that for stocks with this combination, the chance of an earnings surprise is as high as 70%.
Here are our picks.
Everi Holdings Inc. (EVRI - Free Report) : This provider of entertainment and technology solutions for casino and digital gaming will report fourth-quarter 2021 results on Mar 1. EVRI has an earnings ESP of +4.97 and currently carries a Zacks Rank #1. The company has an impressive earnings surprise history, with its earnings having surpassed the Zacks Consensus Estimate in all of the last four quarters, delivering a surprise of 169.4% on average.
Everi’s performance in the quarter is expected to have been positively impacted by the expansion of its installed base of leased gaming units, rise in ship share, same-store increases in financial access transactions, and organic growth of loyalty and regulatory compliance solutions. Strength across businesses and a deep pipeline of new offerings have expectedly driven both topline and bottom line in the quarter.
SoFi Technologies, Inc. (SOFI - Free Report) : This online personal finance company will report fourth-quarter 2021 results on Mar 1. SOFI has an earnings ESP of +1.56 and currently carries a Zacks Rank #3.
SOFI’s results in the quarter are expected to have been positively impacted by strength in personal loans, SoFi Invest, SoFi Money, Lantern by SoFi, Protect and SoFi credit card businesses.
Nielsen Holdings plc : The measurement giant is scheduled to report fourth-quarter 2021 results on Feb 28. NLSN has an earnings ESP of +2.78 and currently carries a Zacks Rank #2. The company has a trailing four-quarter average earnings surprise of 25.1%.
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3 Service Firms Poised to Trump Estimates in Q4 Earnings
Looking back at the fourth quarter of 2021, we see that the service sector had continued gathering steam. The sector kept on rebounding from the pandemic-induced weakness, broadly aided by the recovering economy, manufacturing and non-manufacturing strength, and increased vaccination drives.
A steady economic recovery is evident from the fourth-quarter 2021 GDP number, which, according to the "advance" estimate released by the Bureau of Economic Analysis, grew at an annual rate of 6.9% compared with the increase of 2.3% in the third quarter. Economic activities in both manufacturing as well as non-manufacturing sectors have stayed in the pink in the quarter. Both the manufacturing PMI and the Services PMI measured by the Institute for Supply Management have stayed above the 50% mark for the past 20 consecutive months, indicating continued expansion.
Sector-specific factors that acted as tailwinds in the quarter are essentiality of certain services like waste management, rise in demand for risk mitigation and consulting services, increased expertise in improving operational efficiency and reducing costs, successful work-from-home models, and digital transformation.
Services pertaining to transportation & warehousing; management of companies; retail trade; wholesale trade; accommodation & food; mining; utilities; construction; health care & social assistance; finance & insurance; information technology; education & professional; and scientific & technical fields have stayed healthy in the quarter.
Stocks Poised to Beat This Season
With the existence of a number of players in the sector, finding the right business services stocks that have the potential to beat on earnings can be daunting. Our proprietary methodology, however, makes it fairly simple.
You could narrow down the list of choices by looking at stocks that have the combination of a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), and a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP is our proprietary methodology for determining stocks that have the best chances to surprise with their next earnings announcement. It is the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Our research shows that for stocks with this combination, the chance of an earnings surprise is as high as 70%.
Here are our picks.
Everi Holdings Inc. (EVRI - Free Report) : This provider of entertainment and technology solutions for casino and digital gaming will report fourth-quarter 2021 results on Mar 1. EVRI has an earnings ESP of +4.97 and currently carries a Zacks Rank #1. The company has an impressive earnings surprise history, with its earnings having surpassed the Zacks Consensus Estimate in all of the last four quarters, delivering a surprise of 169.4% on average.
Everi’s performance in the quarter is expected to have been positively impacted by the expansion of its installed base of leased gaming units, rise in ship share, same-store increases in financial access transactions, and organic growth of loyalty and regulatory compliance solutions. Strength across businesses and a deep pipeline of new offerings have expectedly driven both topline and bottom line in the quarter.
Everi Holdings Inc. Price and EPS Surprise
Everi Holdings Inc. price-eps-surprise | Everi Holdings Inc. Quote
SoFi Technologies, Inc. (SOFI - Free Report) : This online personal finance company will report fourth-quarter 2021 results on Mar 1. SOFI has an earnings ESP of +1.56 and currently carries a Zacks Rank #3.
SOFI’s results in the quarter are expected to have been positively impacted by strength in personal loans, SoFi Invest, SoFi Money, Lantern by SoFi, Protect and SoFi credit card businesses.
SoFi Technologies, Inc. Price and EPS Surprise
SoFi Technologies, Inc. price-eps-surprise | SoFi Technologies, Inc. Quote
Nielsen Holdings plc : The measurement giant is scheduled to report fourth-quarter 2021 results on Feb 28. NLSN has an earnings ESP of +2.78 and currently carries a Zacks Rank #2. The company has a trailing four-quarter average earnings surprise of 25.1%.
Nielsen Holdings Plc Price and EPS Surprise
Nielsen Holdings Plc price-eps-surprise | Nielsen Holdings Plc Quote
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.