SIRIUS XM Holdings Inc. (SIRI) is scheduled to release fourth-quarter 2015 results on Feb 2, before market opens.
Last quarter, SIRIUS XM recorded a 0.00% surprise. Moreover, the trailing four-quarter average earnings surprise stands at a negative 8.33%. Let’s see how things are shaping up for this announcement.
Factors Likely to Influence This Quarter
SIRIUS XM has strong telematics partnerships with almost all major car manufacturers, which include the likes of Acura, BMW, Honda, Hyundai, Infiniti, Lexus, Nissan and Toyota. Moreover, launch of new value-added services have encouraged the company to boost subscriber growth. The company estimates an addition of two million subscribers in 2015.
However, SIRIUS XM’s business depends upon automakers to a large extent. The precipitous global economic fluctuations and the company’s extensive dependence on the auto industry may impact its financial report.
Earnings Whispers
Our proven model does not conclusively show that SIRIUS XM is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: SIRIUS XM’s Earnings ESP is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are poised at 3 cents.
Zacks Rank: SIRIUS XMhas a Zacks Rank #3 which increases the predictive power of ESP. However, a 0.00% ESP makes surprise prediction difficult.
Note that, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies that you may consider instead as our model shows they have the right combination of elements to post an earnings beat this quarter:
InterDigital, Inc. IDCC has an earnings ESP of +33.33% and a Zacks Rank #2.
Level 3 Communications, Inc. LVLT has an earnings ESP of +5.77% and a Zacks Rank #3.
The Walt Disney Company DIS has an earnings ESP of +1.38% 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 >>
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