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Can Strong Product Portfolio Aid Control4 (CTRL) Q3 Earnings?

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Control4 Corporation (CTRL - Free Report) is slated to report third-quarter 2018 results on Nov 1. In the last reported quarter, the company delivered a positive earnings surprise of 31.25%.

Notably, Control4 beat the Zacks Consensus Estimate in all the trailing four quarters, delivering an average positive surprise of 33.38%.

In the last reported quarter, Control4’s adjusted earnings of 42 cents per share surpassed the Zacks Consensus Estimate by 10 cents.

Revenues of $69.2 million were up 13% year over year and also beat the consensus mark of $68 million.

For the third quarter, Control4 expects revenues in the range of $70.5-$72.5 million and pro-forma earnings between $0.34 and $0.38 per diluted share.

Shares of Control4 have lost 12.1% on a year-to-date basis compared with the industry’s decline of 11.6%.

 

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

Portfolio Strength to Aid Growth

The company’s strong and expanding product portfolio is expected to continue aiding its momentum in the connected home market. This remains a positive for the company’s top-line growth in the near term.

Moreover, Control4’s introduction of new certified showrooms in many cities to make home owners aware of its smart home solution is likely gaining visibility. These efforts are likely to contribute significantly to the top line in the third quarter.

Also, the company has been making efforts to expand its professional dealer network in regions such as the United States, Canada, the United Kingdom, Germany, Australia and China. These efforts should help the company report impressive numbers in the to-be-reported quarter.

Moreover, the recent acquisition of Ihiji to expand Control4’s remote management services should bode well for the quarter to be reported. We believe investments in both product and programs should help the company to expand market share.

Earnings Whispers

Our proven model does not show that Control4 is likely to beat estimates in the to-be-reported 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.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Control4’s Zacks Rank #1 increases the predictive power of ESP. However, a 0.00% ESP 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 witnessing negative estimate revisions.

Control4 Corporation Price and EPS Surprise

 

Control4 Corporation Price and EPS Surprise | Control4 Corporation Quote

Stocks to Consider

You may consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank:

AMETEK, Inc. (AME - Free Report) has an Earnings ESP of +0.71% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Generac Holdings Inc. (GNRC - Free Report) has an Earnings ESP of +3.19% and a Zacks Rank #1.

Advanced Energy Industries, Inc. (AEIS - Free Report) has an Earnings ESP of +2.70% and holds a Zacks Rank #3.

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