We expect the semiconductor company InvenSense INVN to beat expectations when it reports fourth-quarter fiscal 2015 results on May 4.
Why a Likely Positive Surprise?
Our proven model shows that InvenSenseis likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +25.00%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.
Zacks Rank: InvenSensesports a Zacks Rank #1 (Strong Buy).
Note that stocks with a Zacks Rank #1, 2 or 3 have a significantly higher chance of beating earnings estimates. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
The combination of InvenSense’s Zacks Rank #1 and +25.00% ESP makes us reasonably confident in looking for an earnings beat on May 4.
What is Driving the Better-than-Expected Earnings?
InvenSense’s strong market position, compelling new products, superior product designs, continued innovation and increasing demand for new electronic gadgets should result in a positive earnings surprise in fiscal fourth quarter.
Additionally, with technological advancements, demand for smartphones, tablets, console and portable video gaming devices, digital still and video cameras, smart televisions, 3D mice and navigation devices is growing exponentially. InvenSense’s chips target all these and hence we believe that it will witness increased product demand in the to-be-reported quarter and beyond.
InvenSense new design wins with its 6-axis MotionTracking Solutions, solid execution and cost control measures are expected to boost results in the quarter under review.Going forward, the company is well positioned to capture significant market share in the consumer market, including wearable devices, consumer drones, gaming and smart TVs.
Other Stocks to Consider
InvenSenseis not the only firm looking up this earnings season. We also see likely earnings beats coming from these companies:
Imperial Oil Ltd. IMO, with an Earnings ESP of +160.0% and a Zacks Rank #1.
Nordic American Tankers Limited NAT, with an Earnings ESP of +14.81% and a Zacks Rank #1.
Investment Technology Group Inc. ITG, with an Earnings ESP of +13.16% and a Zacks Rank #1.
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