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What's in the Offing for Autohome (ATHM) in Q1 Earnings?

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Autohome Inc. (ATHM - Free Report)  is set to report first-quarter 2019 results on May 8. Notably, the company surpassed the Zacks Consensus Estimate for earnings in the trailing four quarters, with an average positive earnings surprise of 9.5%.

Past-Quarter Performance

Autohome had reported fourth-quarter fiscal 2018 non-GAAP earnings of $1.31 per share which beat the Zacks Consensus Estimate of $1.11 per share.

Revenues of $318.2 million surpassed the Zacks Consensus Estimate of $316 million. The figure was also higher than the year-ago quarter’s revenues of $269 million.

Autohome Inc. Price and Consensus

Autohome Inc. Price and Consensus | Autohome Inc. Quote

What to Expect in Q1

The Zacks Consensus Estimate for first-quarter earnings is pegged at 79 cents per share, indicating an improvement of 12.9% from the year-ago reported figure. Moreover, the Zacks Consensus Estimate for revenues stands at $236.8 million, suggesting growth of 15.3% from the year-ago reported figure.

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

Factors at Play

Autohome’s persistent efforts to strengthen media business and volume growth in traffic and leads in order to expand OEMs wallet are likely to drive the top line in first quarter.

Growing demand for used cars and vehicles sales leads in the marketplace and continued cost cutting measures from the company’s end is expected to positively impact the to-be-reported quarter results.

Additionally, collaboration with OEMs and the dealers is anticipated to positively impact data product penetration, which is yet another positive. Further, strong focus on product innovation and introduction of data products for used vehicles provides the company a competitive edge against its peers, which in turn is likely to impact the top line in the quarter under review.

Moreover, the recent partnership with TTP Advent and the launch of Trusted Alliance will enable Autohome to expand its used vehicles and auto financing business. The company’s partnership synergies and expansion is likely to favor first-quarter results.

The company’s continuous investment in data and technology will aid growth momentum and help Autohome’s ecosystem, which in turn will favor the to-be-reported quarter’s results.

Moreover, the number of average DAUs that utilized Autohome mobile website and app came in at 29 million (an increase of 10% year over year) in the last reported quarter. Mobile advertising revenues in the fourth quarter increased 43% year over year. We believe the momentum will sustain in the quarter under review given the acceleration in used vehicles and auto financing business.

However, the United States and China trade war tension, and weakness in the Chinese market and automobile industry are likely to impact the quarter under review.

What the Zacks Model Unveils

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. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Autohome has a Zacks Rank #1 and an Earnings ESP of -1.27%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are some stocks worth considering as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases..

Electronic Arts Inc. (EA - Free Report) has an Earnings ESP of +11.35% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northern Oil and Gas, Inc. (NOG - Free Report) has an Earnings ESP of +1.67% and a Zacks Rank #3.

Wynn Resorts, Limited (WYNN - Free Report) has an Earnings ESP of +2.98% and a Zacks Rank #3.

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