Changyou.com Limited CYOU is set to report fourth-quarter 2015 results on Feb 1. Last quarter, the company delivered a positive earnings surprise of 181.8%. Also, the company delivered positive earnings surprises in all the last four quarters, bringing the average to 115.05%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Changyou has gained recognition for its offerings like Tian Long Ba Bu (TLBB). Also, the company unveiled TLBB 3D in 2014, which continues to drive demand. Additionally, the China-based game developer stepped up the R&D efforts to develop more innovative and user friendly mobile games. These should help the company post decent results in the fourth quarter.
However, the macroeconomic turmoil in China, the world’s largest online gaming market, has been a significant concern for a number of companies.
Along with these factors, Changyou is facing operational challenges from the ongoing transition. Also, sluggishness in the online game and advertising businesses hurt margins. Increasing expenses from game operations as well as competition from players like NetEase, Inc. NTES remain the concerns for the to-be-reported quarter results.
Changyou currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 54 cents.
Stocks to Consider
Here are a couple of stocks that have a favorable rank and a positive ESP and are likely to post an earnings beat this quarter:
Avalonbay Communities Inc. AVB has an Earnings ESP of +0.51% and a Zacks Rank #2 (Buy).
Vornado Realty Trust VNO has an Earnings ESP of +2.33% and a Zacks Rank #3 (Hold).
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