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Tale of the Tape

Zacks Equity Research

Can Mimecast (MIME) Keep the Earnings Streak Alive This Quarter?
October 04, 2016


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Looking for a stock that might be in a good position to beat earnings at its next report? Consider Mimecast Limited (MIME - Snapshot Report) , a firm in the Internet Software industry, 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, MIME has beaten estimates by at least 50% in both cases, suggesting it has a nice short-term history of crushing expectations.

Earnings in Focus

Two quarters ago, MIME expected to post a loss of 8 cents per share, while it actually produced a loss of 4 cents per share, a beat of 50%. Meanwhile, for the most recent quarter, the company looked to deliver a loss of 7 cents per share, when it actually saw break even earnings per share instead, representing a 100% positive surprise.

MIMECAST LTD Price and EPS Surprise


MIMECAST LTD Price and EPS Surprise | MIMECAST LTD Quote

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

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 MIME, as the firm currently has a Zacks Earnings ESP of 20%, so another beat could be around the corner.

This is particularly true when you consider that MIME 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 MIME could see another beat at its next report, especially if recent trends are any guide.

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