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LogMeIn (LOGM) to Report Q1 Earnings: What to Expect?

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LogMeIn, Inc. (LOGM - Free Report) is expected to release first-quarter 2020 results on Apr 23.

Notably, the company had not issued any guidance during its fourth-quarter 2019 results and did not hold conference call as well due to the impending acquisition agreement. Last December, LogMeIn agreed to be sold for $4.3 billion to affiliates of Francisco Partners and Elliott Management Corporation.

Coming to the first-quarter estimates, the Zacks Consensus Estimate for earnings is pegged at $1.22, which has been unrevised over the past 30 days. The consensus mark for revenues is pinned at $322.2 million, suggesting a 4.6% increase from the year-ago quarter’s reported figure.

LogMeIn's earnings have surpassed the Zacks Consensus Estimate in the trailing four quarters, the average positive beat being 2.6%.

In the last reported quarter, LogMeIn’s non-GAAP earnings of $1.43 per share beat the Zacks Consensus Estimate by 2.1%. Revenues of $322.9 million also surpassed the consensus mark by 0.9%.

 

Let’s see how things have shaped up prior to the upcoming announcement.

Key Factors

LogMeIn’s first-quarter performance is anticipated to have benefited from the rising demand for offsite-working tools amid the coronavirus-led global lockdown. Notably, due to the heightening coronavirus fears, organizations across the globe have advised employees to work from home unless their role on-site is essential. As a result, companies offering remote-working software and services like LogMeIn are witnessing huge demand for their products.

The company’s first-quarter performance is also likely to have benefited from its robust product portfolio, which is aiding customer wins. Improvement in product quality and performance, multiple product launches and increasing marketing efforts might have been steady tailwinds.

Further, a solid net revenue-retention rate highlighting a healthy renewal rate in the previous quarters is likely to have continued in the quarter under review.

LogMeIn’s Unified Communications as a Service (UCaas) products, mainly Jive and our GoToConnect, are likely to have continued the double-digit revenue growth momentum during the period under discussion. In the third quarter of 2019, its UCaas products registered 37% year-over-year growth, while new and add-on sales were up 60%.

Nonetheless, the ramp-up of marketing spends and lower pricing might have negatively impacted the company’s first-quarter performance. Notably, during the third-quarter 2019 earnings conference call, LogMeIn had said that it would increase its marketing expenses from the fourth quarter. The company’s sales and marketing expenses as a percentage of revenues increased to 37% in 2019 from 32% in 2018.

During the third-quarter 2019 conference call, it had also announced the price reduction of various products to acquire new customers and improve renewal rates.

What Our Model Says

Our proven model does not predict an earnings beat for LogMeIn this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances 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.

LogMeIn currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

InterDigital, Inc. (IDCC - Free Report) has an Earnings ESP of +152% and carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

CrowdStrike Holdings Inc. (CRWD - Free Report) has an Earnings ESP of +4.00% and holds a Zacks Rank of 2, currently.

Citrix Systems, Inc. (CTXS - Free Report) has an Earnings ESP of +1.58% and currently carries a Zacks Rank of 2.

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