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Pareteum (TEUM) to Post Q1 Earnings: What's in the Cards?

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Pareteum is set to report first-quarter 2019 results on May 7.

The company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 123.8%.

In the last reported quarter, Pareteum reported non-GAAP earnings of 2 cents per share that beat the Zacks Consensus Estimate by a penny.

Revenues of $14.3 million surged 256.4% year over year and comfortably surpassed the consensus mark of $12 million. Moreover, net dollar-based expansion rate was 214%.

The Zacks Consensus Estimate for revenues currently stands at $20.9 million, suggesting growth of 408.5% from the figure reported in the year-ago quarter.

Meanwhile, the consensus mark for first-quarter loss has narrowed from 4 cents to 3 cents over the past 30 days.

Pareteum Corp. Price and EPS Surprise


Pareteum Corp. Price and EPS Surprise | Pareteum Corp. Quote

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

Key Factors to Consider

Pareteum’s mission is to connect every person and everything. This software-as-a-service (SaaS) platform provider’s first-quarter 2019 results are expected to benefit from an expanding customer base. Notably, the company exited 2018 with 533 customers compared with 25 at the end of 2017.

Moreover, Pareteum won 3-year contracts from 20 new customers across the globe, worth $30 million, in February 2019. Further, in March, the company won contracts worth $100 million.

Although these contracts don’t materially impact first-quarter results, they reflect growing demand for Pareteum’s software solution that enables mobile virtual network operator (MVNOs), IoT and applications on one network or cloud.

The company is benefiting from more than 70 partnership agreements with global mobile network operators (MNOs) that allows it to resell surplus network capacity to MVNO’s as per the latter’s need. The company’s current customer base includes enterprises, communication service providers and developers, and IoT services.

Additionally, the acquisitions of Artilium and iPass have strengthened Parateum’s portfolio and helped it offer end-to-end services. This is expected to drive top-line growth.

In late March, the company inked a sales transaction with Citrix Systems CTXS, under which the latter will migrate employees to a cloud-based deployment of Pareteum's iPass SmartConnect solution.

These acquisitions are also providing significant synergies in terms of cost savings, which are likely to drive margins in the soon-to-be-reported quarter.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. Meanwhile, Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Pareteum has a Zacks Rank #3 and an Earnings ESP of +33.33%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks That Warrant a Look

Here are two other stocks you may want to consider, as our model suggests that these have the right combination of elements to deliver an earnings beat this earnings season.

Agilent Technologies A has an Earnings ESP of +2.10% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Intuit INTU has an Earnings ESP of +0.59% and a Zacks Rank #2.

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