Conn’s Inc. CONN is slated to report its fourth-quarter fiscal 2015 results on Mar 31, 2015. In the last quarter, the company had delivered a negative surprise of 111.76%. Let’s see how things are shaping up for this announcement.
Factors Influencing This Quarter
Conn’s was hit by extremely high delinquency rates in the previous quarter and it expects these rates to continue rising. Management believes that the headwinds related to volatility in the subprime consumer credit market will persist, an inherent trait, and impact the company’s performance.
However, the company recently created a Credit Risk and Compliance Committee to battle the challenges in the credit segment. Apart from this, Conns’ board authorized its management to properly explore, analyze and look for ways to improve shareholder value.
Moreover, Conn’s is hopeful about receiving some cushion from its retail segment, which is performing well backed by store openings.
Earnings Whispers?
Our proven model does not conclusively show that Conn’s is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Conn’s Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 63 cents.
Zacks Rank: Conn’s carries a Zacks Rank #3 (Hold). Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Bed Bath & Beyond Inc. BBBY has an Earnings ESP of +0.55% and a Zacks Rank #3.
Rite Aid Corp. RAD has an Earnings ESP of +14.29% and a Zacks Rank #3.
CarMax Inc. KMX has an Earnings ESP of +3.33% and a Zacks Rank #3.
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
Be the first to comment