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Will Sphere 3D (ANY) Post a Surprise this Earnings Season?

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Sphere 3D Corp. is set to report third-quarter 2016 results on Nov 14, 2016. Last quarter, the company posted a positive earnings surprise of 50%. Let’s see how things are shaping up for this announcement.

Factors to Consider

Sphere 3D is a virtualization technology solution provider. Though the company reported a loss in the second quarter, it compared favorably with the Zacks Consensus Estimate. Revenues however missed the consensus mark.

Sphere 3D’s second-quarter revenues increased 11.1% year over year to $20 million. Unfortunately, the company has a history of incurring losses. In the last quarter, the company suffered a loss of 9 cents per share compared with a loss of 15 cents per share reported in the year-ago period.

However, we believe that the company’s strategy of growing through acquisitions will drive its revenues. Moreover, its sustained focus on product innovation and strategic alliances will continue to help in winning more deals.

Nonetheless, increased investment may impact the company’s near-term profitability.

SPHERE 3D CORP Price and EPS Surprise

Earnings Whispers

Our proven model does not conclusively show that Sphere 3Dis likely to beat earnings this quarter. This 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 stand at a loss of 18 cents. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Sphere 3D’s Zacks Rank #3 when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few companies worth considering which, as per our model, have the right combination of elements to post an earnings beat this quarter:

Asure Software, Inc. (ASUR - Free Report) , with an Earnings ESP of +14.29% and a Zacks Rank #3

Broadcom Limited (AVGO - Free Report) , with an Earnings ESP of +1.74% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here

Methanex Corporation (MEOH - Free Report) , with an Earnings ESP of +300.00% and a Zacks Rank #3

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