Web.com Group, Inc. (WEB - Free Report) is scheduled to release second-quarter 2017 results on Aug 3 after the closing bell. The company has delivered an average positive earnings surprise of 12.26% in the trailing four quarters.
Moreover, the online marketing services provider posted adjusted revenue of $186.8 million in first-quarter 2017, which beat the Zacks Consensus Estimate of $182.7 million.
Furthermore, we note that Web.com shares have increased 18% in the past year, outperforming the industry’s gain of 16%.
For second-quarter 2017, Web.com projects non-GAAP revenues to be in the range of $185–$188 million.
Further, it anticipates non-GAAP revenue for full-year 2017 to be approximately $748–$760 million and adjusted EBITDA between $188 million and $192 million.
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
Web.com is actively ramping up portfolio of high quality security products in a bid to enhance online security of customers. This augurs well for the company, bringing in more subscribers for its services and impacting the top line in a positive manner.
Notably, Web.com has been undertaking strategic acquisitions to boost its operations. It had earlier acquired one of the foremost providers of cloud-based marketing solutions for SMBs, Yodle. It also acquired Latin America-based, web hosting and domain registration firm – Donweb.com – to accelerate overseas expansion.
Even though an increasingly competitive business environment remains a concern, we believe that the aforementioned acquisitions will positively impact Web.com’s overall second-quarter performance.
Our proven model does not conclusively show that Web.com will beat on 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 at least 3 (Hold) for this to happen. That is not the case here, as you will see below:
Zacks ESP: Web.com’s Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 66 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Web.com currently carries a Zacks Rank #3, which when combined with an Earnings ESP of 0.00%, makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:
Kemet Corp. (KEM - Free Report) with an Earnings ESP of +11.11% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank Stocks here.
Vishay Intertechnology, Inc. (VSH - Free Report) with an Earnings ESP of +6.06% and a Zacks Rank #1.
CGI Group, Inc. (GIB - Free Report) with an Earnings ESP of +4.23% and a Zacks Rank #2.
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