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Will Portfolio Expansion Aid Alarm.com (ALRM) Q2 Earnings?

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Alarm.com Holdings, Inc. (ALRM - Free Report) will report second-quarter 2018 results on Aug 7. In the first quarter, the company delivered a positive earnings surprise of 25.9%.

The surprise history has been impressive in Alarm.com’s case. The company surpassed estimates in each of the trailing four quarters, with an average positive surprise of 49.1%.

We observe that the company's shares have gained 16.8% on a year-to-date basis against its industry’s loss of 23.3%.

Let's see how things are shaping up for this announcement.

Portfolio Expansion to Drive Top Line

Alarm.com has been expanding and enhancing its portfolio of video cameras to tap a wide range of commercial customers. In the first quarter, the company announced the expansion of Alarm.com for Business. This new solution will help the service providers to open new opportunities in the small and medium-sized business marketplace.

The company unveiled a Smarter Access Control solution designed specifically for small and medium-sized businesses, which completely integrates with the Alarm.com cloud-based platform. These efforts will broaden the range of systems with which Alarm.com can integrate and thus enhance the company’s top-line growth.

We expect these moves to contribute to Alarm.com’s revenues and margin expansion in the soon-to-be-reported quarter.

Customer Connection Program to Increase Upsell and Retention

The company is making considerable progress with its Customer Connection program that is aimed at increasing upsell and retention. Since its launch, the company has successfully added several pre-configured campaigns to help service providers increase up-sells and referrals, and boost consumer engagement. Significant progress is expected on this front.

What Our Model Suggests

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if these have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Alarm.com has a Zacks Rank #3 and an Earnings ESP of -1.42%, a combination that suggests that the company is not likely to beat estimates this time around.

Alarm.com Holdings, Inc. Price and EPS Surprise

 

Alarm.com Holdings, Inc. Price and EPS Surprise | Alarm.com Holdings, Inc. Quote

Stocks to Consider

We see a likely earnings beat for each of the following companies:

Vishay Intertechnology, Inc. (VSH - Free Report) has an Earnings ESP of +2.41% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Infinera Corporation (INFN - Free Report) has an Earnings ESP of +3.57% and a Zacks Rank of #2.

Avnet, Inc. (AVT - Free Report) has an Earnings ESP of +1.37% and a Zacks Rank #2.

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