Can Cempra (CEMP) Keep the Earnings Streak Alive This Quarter? – 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, CEMP 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, CEMP projected to incur a loss of 55 cents per share, while it actually produced loss of 49 cents per share, a beat of 10.9%. Meanwhile, for the most recent quarter, the company looked to incur loss of 59 cents per share, when it actually saw loss of 34 cents per share instead, representing a 42.4% positive surprise.

Thanks in part to this history, recent estimates have been moving higher for Cempra. In fact, the Earnings ESP for CEMP 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 CEMP, as the firm currently has a Zacks Earnings ESP of 22.22%, so another beat could be around the corner.

This is particularly true when you consider that CEMP has a great Zacks Rank #2 (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 CEMP could see another beat at its next report, especially if recent trends are any guide.

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