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Tale of the Tape

Zacks Equity Research

Why Alarm.Com (ALRM) Could Beat Earnings Estimates Again
October 07, 2016

ALRM

Trades from $3

Looking for a stock that might be in a good position to beat earnings at its next report? Consider Alarm.Com Holdings, Inc. (ALRM - Free Report) , a firm in the security solutions 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, ALRM has beaten estimates by at least 20% in both cases, suggesting it has a nice short-term history of crushing expectations.

Earnings in Focus

Two quarters ago, ALRM expected to post earnings of 9 cents per share, while it actually produced earnings of 11 cents per share, a beat of 22.2%. Meanwhile, for the most recent quarter, the company looked to deliver earnings of 10 cents per share, when it actually saw earnings of 13 cents per share instead, representing a 30% positive surprise.

ALARM.COM HLDGS Price and EPS Surprise
 

ALARM.COM HLDGS Price and EPS Surprise | ALARM.COM HLDGS Quote

Thanks in part to this history, recent estimates have been moving higher for Alarm.Com. In fact, the Earnings ESP for ALRM 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 ALRM, as the firm currently has a Zacks Earnings ESP of 10.00%, so another beat could be around the corner.

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

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