Netgear Inc. NTGR is set to report first-quarter 2015 results on Apr 23. Last quarter, the company posted a 1.89% positive earnings surprise. The company has posted an average positive earnings surprise of 9.61% over the past four quarters.
Let’s see how things are shaping up for this announcement.
Factors to Consider
We believe that Netgear’s improving sales execution, particularly in the European market will primarily drive results. Additionally, a strong product portfolio is expected to boost the top line going forward. The company had unveiled six products at the 2015 International CES, reflecting its increased focus toward Internet of Things (IoT). Recently, it launched two networking adapter kits for advanced Powerline technology that enables speedier video streaming and gaming
However, stiff competition in the network attached storage market (NAS) from EMC Corp. EMC remains a concern.
Earnings Whispers
Our proven model does not conclusively show that Netgear is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here as you will see below.
Zacks ESP: Netgear currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 41 cents per share.
Zacks Rank: Netgear has a Zacks Rank #3 (Hold), which when combined with a 0.00% ESP, 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 momentum.
Stocks to Consider
Here are some stocks worth considering that, as per our model, have the right combination of elements to post an earnings beat this quarter:
Apple Inc. AAPL with an Earnings ESP of +2.79% and a Zacks Rank #2 (Buy).
PartnerRe Ltd. PRE with an Earnings ESP of +4.40% and a Zacks Rank #2.
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