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Elastic (ESTC) to Post Q3 Earnings: What's in the Cards?

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Elastic N.V. (ESTC - Free Report) is scheduled to report third-quarter fiscal 2020 earnings on Feb 26, after the bell.

The company has an impressive surprise history, having delivered earnings beat in each of the last four quarters with a positive surprise of 26.7%, on average.

Shares of the company have gained 14.4% year to date, outperforming the 11.8% rally of the industry it belongs to.

Q3 Expectations

The Zacks Consensus Estimate for the to-be-reported quarter’s revenues is pegged at $107.1 million, indicating 51.2% from the year-ago quarter’s reported figure. While the company’s subscription revenues are expected to have increased due to volume-driven increases from new business, professional services revenues are likely to have been driven by increased adoption of professional services offerings.

The Zacks Consensus Estimate for Elastic’s bottom line is pegged at a loss of 35 cents for the to-be-reported quarter, indicating deterioration from loss of 16 cents incurred in the third quarter of fiscal 2019. Increased expenses due to continued investment in sales and marketing, research and development, infrastructure and global expansion efforts are likely to have weighed on the bottom line.

What Our Model Says

Our proven Zacks model does not conclusively predict an earnings beat for Elastic this season. The combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Elastic has an Earnings ESP of 0.00% and a Zacks Rank #3.

Stocks to Consider

Here are a few stocks that investors may consider as our model shows that these have the right combination of elements to beat on earnings:

Casey's General Stores CASY, with an Earnings ESP of +3.45% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The J. M. Smucker Company SJM, with an Earnings ESP of +0.39% and a Zacks Rank #3.

Recent Release

Xerox XRX reported fourth-quarter 2019 adjusted earnings of $1.33 that beat the consensus mark by 30.4%. The stock currently sports a Zacks Rank #1.

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