Why the Earnings Streak Will Continue for OmniVision (OVTI) – Tale of the Tape

This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, OVTI has beaten estimates by at least 60% in both cases, suggesting it has a nice short-term history of crushing expectations.

Earnings in Focus

Two quarters ago, OVTI expected to earn 29 cents per share, while it actually produced earnings of 47 cents per share, a beat of 62.1%. Meanwhile, for the most recent quarter, the company looked to deliver earnings of 21 cents per share, when it actually saw earnings of 56 cents per share instead, a significant beat.

Thanks in part to this history, recent estimates have been moving higher for OmniVision. In fact, the Earnings ESP for OVTI is positive, which is a great sign of a coming beat.

After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company’s earnings prospects. This is the case for OVTI, as the firm currently has a Zacks Earnings ESP of 50.00%, so another beat could be around the corner.

This is particularly true when you consider that OVTI has a great Zacks Rank #1 (Strong Buy) which can be a harbinger of outperformance and a signal for a strong earnings profile. And when you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that OVTI could see another beat at its next report, especially if recent trends are any guide.

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