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Can Alarm.Com (ALRM) Spring a Surprise in Q2 Earnings?
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Alarm.Com Holdings, Inc. (ALRM - Free Report) is expected to report second-quarter 2016 results on August 15. The last quarter, the company posted a massive positive earnings surprise of 22.22%.
Let's see how things are shaping up for this announcement.
Factors to Consider
Alarm.Com offers cloud-based security and home automation products. By relying on cloud technology, the company significantly reduces operating costs and allows users to manage their home from anywhere. For example, users can remotely control any aspect of the home, including security systems, thermostats, light switches and even garage doors through a mobile application. The company also offers wellness and activity tracking software.
The company’s first-quarter earnings beat the Zacks Consensus Estimate by 2 cents. Also, revenues of $59.0 million were up 28% year over year. Moreover, SaaS and license revenues rose 25% year over year to $40.0 million.
The company has a differentiated product portfolio and broad dealer network. It is working toward building new service provider relationships, breaking new grounds in product innovation and achieving international reach. In sum, this will help the company to penetrate the home automation and security market, and gain share. This will also help in expanding its customer base, thereby driving results.
Alarm.Com is already poised to a vantage to be a major player in the expanding home automation industry. For the second quarter, the company expects SaaS and license revenues in the range of $41.2–$41.4 million.
However, intensifying competition and an uncertain macro environment could impact results in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Alarm.Com will beat on earnings this quarter. That 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. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate are at 10 cents. Hence, the difference, which is Zacks ESP, is 0.00%.
Zacks Rank: Alarm.Com’s Zacks Rank #3 increases the predictive power of ESP. But a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or #5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
You could consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank:
Alamos Gold, Inc. (AGI - Free Report) has an Earnings ESP of +50.0% and a Zacks Rank #2. The company is slated to report second-quarter 2016 earnings results on Aug 10, 2016.
Eaton Vance Corp. (EV - Free Report) has an Earnings ESP of +1.82% and a Zacks Rank #2. The company is expected to report third-quarter fiscal 2016 earnings results on Aug 17, 2016.
Synopsys Inc. has an Earnings ESP of +6.90% and a Zacks Rank #2. The company is expected to report second-quarter 2016 earnings results on Aug 30, 2016.
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Can Alarm.Com (ALRM) Spring a Surprise in Q2 Earnings?
Alarm.Com Holdings, Inc. (ALRM - Free Report) is expected to report second-quarter 2016 results on August 15. The last quarter, the company posted a massive positive earnings surprise of 22.22%.
Let's see how things are shaping up for this announcement.
Factors to Consider
Alarm.Com offers cloud-based security and home automation products. By relying on cloud technology, the company significantly reduces operating costs and allows users to manage their home from anywhere. For example, users can remotely control any aspect of the home, including security systems, thermostats, light switches and even garage doors through a mobile application. The company also offers wellness and activity tracking software.
The company’s first-quarter earnings beat the Zacks Consensus Estimate by 2 cents. Also, revenues of $59.0 million were up 28% year over year. Moreover, SaaS and license revenues rose 25% year over year to $40.0 million.
The company has a differentiated product portfolio and broad dealer network. It is working toward building new service provider relationships, breaking new grounds in product innovation and achieving international reach. In sum, this will help the company to penetrate the home automation and security market, and gain share. This will also help in expanding its customer base, thereby driving results.
Alarm.Com is already poised to a vantage to be a major player in the expanding home automation industry. For the second quarter, the company expects SaaS and license revenues in the range of $41.2–$41.4 million.
However, intensifying competition and an uncertain macro environment could impact results in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Alarm.Com will beat on earnings this quarter. That 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. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate are at 10 cents. Hence, the difference, which is Zacks ESP, is 0.00%.
Zacks Rank: Alarm.Com’s Zacks Rank #3 increases the predictive power of ESP. But a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or #5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
ALARM.COM HLDGS Price and EPS Surprise
ALARM.COM HLDGS Price and EPS Surprise | ALARM.COM HLDGS Quote
Stocks to Consider
You could consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank:
Alamos Gold, Inc. (AGI - Free Report) has an Earnings ESP of +50.0% and a Zacks Rank #2. The company is slated to report second-quarter 2016 earnings results on Aug 10, 2016.
Eaton Vance Corp. (EV - Free Report) has an Earnings ESP of +1.82% and a Zacks Rank #2. The company is expected to report third-quarter fiscal 2016 earnings results on Aug 17, 2016.
Synopsys Inc. has an Earnings ESP of +6.90% and a Zacks Rank #2. The company is expected to report second-quarter 2016 earnings results on Aug 30, 2016.
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 >>