Synaptics Inc. SYNA is set to report third-quarter fiscal 2015 results on Apr 23. Last quarter, the company posted positive earnings surprise of 69.7%. The company has posted an average positive earnings surprise of 13.62% over the trailing four quarters.
Let’s see how things are shaping up for this quarter.
Factors to Consider
Synaptics’ robust position in the touch-based interface market is a major growth driver, which should boost third-quarter earnings. Further, the company has been innovating to maintain and expand its premiere position in the human interface solutions market.
Though a key supplier of display drivers for Apple’s AAPL iPhone, media reports state that Synaptics has lost the contract from Samsung to provide the touch controller socket for the forthcoming Samsung Galaxy S6 to STMicroelectronics NV STM. The loss of this crucial deal is likely to affect results in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Synaptics is likely to beat earnings this quarter. That 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: Synaptics currently has an ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.34 per share.
Zacks Rank: Synaptics has a Zacks Rank #4 (Sell).
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stock to Consider
Here's a stock worth considering that, as per our model, has the right combination of elements to post an earnings beat this quarter:
Broadcom Corp. BRCM, with an Earnings ESP of +5.00% and a Zacks Rank #1 (Strong Buy).
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