Why Cobalt International Energy (CIE) Could Beat Earnings Estimates Again – 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, CIE has beaten estimates by at least 10% in both cases, suggesting it has a nice short-term history of crushing expectations.

Earnings in Focus

Two quarters ago, CIE was expected to report a loss of 17 cents per share, while it actually reported loss of 14 cents per share, a beat of 17.65%. Meanwhile, for the most recent quarter, the company looked to report a loss of 17 cents per share, when it actually saw a loss of 13 cents per share instead, representing a 23.53% positive surprise.

Thanks in part to this history, recent estimates have been moving higher for Cobalt International Energy. In fact, the Earnings ESP for CIE 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 CIE, as the firm currently has a Zacks Earnings ESP of 11.11%, so another beat could be around the corner.

This is particularly true when you consider that CIE 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 CIE could see another beat at its next report, especially if recent trends are any guide.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>