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Tale of the Tape

Zacks Equity Research

Will KLA-Tencor (KLAC) Crush Estimates at Its Next Earnings Report?
September 29, 2016


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Looking for a stock that might be in a good position to beat earnings at its next report? Consider KLA-Tencor Corporation (KLAC - Analyst Report) , a firm in the Semiconductor Equipment Manufacturing -Wafer Fabrication space, which could be a great candidate for another beat.

This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, KLAC has beaten estimates by at least 15% in both cases, suggesting it has a nice short-term history of crushing expectations.

Earnings in Focus

Two quarters ago, KLAC expected to post earnings of $1.00 per share, while it actually produced earnings of $1.15 per share, a beat of 15%. Meanwhile, for the most recent quarter, the company looked to deliver earnings of $1.43 per share, when it actually produced earnings of $1.77 per share, a beat of 23.8%.

Thanks in part to this history, recent estimates have been moving higher for KLA-Tencor. In fact, the Earnings ESP for KLAC is positive, which is a great sign of a coming beat.

KLA-TENCOR CORP Price and EPS Surprise

After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company’s earnings prospects. This is the case for KLAC, as the firm currently has a Zacks Earnings ESP of 2.83%, so another beat could be around the corner.

This is particularly true when you consider that KLAC has a great Zacks Rank #2 (Buy) which can be a harbinger of outperformance and a signal for a strong earnings profile. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

When you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that KLAC could see another beat at its next report, especially if recent trends are any guide.

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