We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Scientific Games (SGMS) Q4 Earnings Spring a Surprise?
Read MoreHide Full Article
Scientific Games Corporation is expected to report fourth-quarter 2016 results on Mar 2. Last quarter, it posted a negative earnings surprise of 25.56%. Scientific Games has posted positive earnings surprises in three of the trailing four quarters, resulting in an average positive earnings surprise of 13.88%.
Let’s see how things are shaping up for this announcement.
Factors at Play
Scientific Games’ premium position in the gaming equipment space along with a robust product line and a recovering financial position are significant positives.
Also, strategic acquisitions have been a key part of Scientific Games’ growth story over the years. Acquisitions such as Bally Technologies and WMS Industries, Parspro and GameLogic have expanded the company’s ability to offer computerized systems and services to the global gaming industry.
However, Scientific Games' business has been impacted by weakness in the gaming segment, especially with regard to WAP, premium installed base and gaming systems. Also, the acquisitions put Scientific Games’ balance sheet under pressure as the company opted for debt financing for the buyout. Further, significant competition continues to be a major concern.
Our proven model does not conclusively show that Scientific Games is 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: Scientific Games has an Earnings ESP of -36.26%. This is because the Most Accurate estimate stands at a loss of $1.24 whereas the Zacks Consensus Estimate stands at a loss of 91 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Scientific Games has a Zacks Rank #3. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s negative ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks that, as per our model, have the right combination of elements to post an earnings beat this quarter:
Broadcom Limited (AVGO - Free Report) with an Earnings ESP of +0.66% and a Zacks Rank #3.
Lexington Realty Trust (LXP - Free Report) with an Earnings ESP of +4.17% and a Zacks Rank #3.
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Will Scientific Games (SGMS) Q4 Earnings Spring a Surprise?
Scientific Games Corporation is expected to report fourth-quarter 2016 results on Mar 2. Last quarter, it posted a negative earnings surprise of 25.56%. Scientific Games has posted positive earnings surprises in three of the trailing four quarters, resulting in an average positive earnings surprise of 13.88%.
Let’s see how things are shaping up for this announcement.
Factors at Play
Scientific Games’ premium position in the gaming equipment space along with a robust product line and a recovering financial position are significant positives.
Also, strategic acquisitions have been a key part of Scientific Games’ growth story over the years. Acquisitions such as Bally Technologies and WMS Industries, Parspro and GameLogic have expanded the company’s ability to offer computerized systems and services to the global gaming industry.
However, Scientific Games' business has been impacted by weakness in the gaming segment, especially with regard to WAP, premium installed base and gaming systems. Also, the acquisitions put Scientific Games’ balance sheet under pressure as the company opted for debt financing for the buyout. Further, significant competition continues to be a major concern.
Scientific Games Corp Price and EPS Surprise
Scientific Games Corp Price and EPS Surprise | Scientific Games Corp Quote
Earnings Whispers
Our proven model does not conclusively show that Scientific Games is 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: Scientific Games has an Earnings ESP of -36.26%. This is because the Most Accurate estimate stands at a loss of $1.24 whereas the Zacks Consensus Estimate stands at a loss of 91 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Scientific Games has a Zacks Rank #3. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s negative ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks that, as per our model, have the right combination of elements to post an earnings beat this quarter:
Best Buy Co., Inc. (BBY - Free Report) with an Earnings ESP of +1.81% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Broadcom Limited (AVGO - Free Report) with an Earnings ESP of +0.66% and a Zacks Rank #3.
Lexington Realty Trust (LXP - Free Report) with an Earnings ESP of +4.17% and a Zacks Rank #3.
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>