We expect semiconductor company InvenSense, Inc. (INVN) to beat expectations when it reports the second-quarter fiscal 2015 results on Oct 28.
Why a Likely Positive Surprise?
Our proven model shows that InvenSenseis likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +10.0%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.
Zacks Rank: InvenSensehas a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1, 2 or 3 have a significantly higher chance of beating earnings estimates. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
The combination of InvenSense’s Zacks Rank #2 and +10.00% ESP makes us reasonably confident in looking for a positive earnings beat.
What is Driving the Better-than-Expected Earnings?
InvenSense’s new products, design wins with its 6-axis MotionTracking Solutions and 2-axis OIS products, solid execution and cost control measures are expected to result in a positive earnings surprise in the upcoming quarter.
Additionally, with technological advancements, demand for smartphones, tablets, console and portable video gaming devices, digital still and video cameras, smart televisions, 3D mice, and navigation devices are growing exponentially. InvenSense’s chips target all these categories and hence we believe that its product demand would experience a ramp up. We believe InvenSense’s growth strategies and solid execution will help it to continue on the growth path.
Other Stocks to Consider
InvenSenseis not the only firm looking up this earnings season. We also see likely earnings beats coming from these companies:
The New York Times Company (NYT), with an Earnings ESP of +100.0% and a Zacks Rank #1 (Strong Buy).
Westlake Chemical Corp (WLK), with an Earnings ESP of +2.58% and a Zacks Rank #1.
Pacific Coast Oil Trust (ROYT), with an Earnings ESP of +8.11% and a Zacks Rank #1.
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