The cloud-based inbound marketing and sales software platform provider, HubSpot, Inc. (HUBS), is set to report fourth-quarter 2014 results on Feb 11. Last quarter, the company posted a negative earnings surprise of 12.2%. Let’s see how things are shaping up for this announcement.
Factors to Consider
HubSpot is a provider of inbound marketing software platform that helps companies to attract visitors to their websites, convert visitors into leads, and close leads into customers. We are encouraged by the company’s sustained focus on investing in new product developments and international expansion which will continue to drive its top line.
Furthermore, the company’s newly launched HubSpot CRM platform is likely to drive fourth-quarter revenues. Additionally, continuous rise in HubSpot’s revenue per user rate makes us optimistic about its top-line performance in the to-be-reported quarter.
However, we remain cautious about HubSpot’s bottom-line performance due to higher customer acquisition costs.
Earnings Whispers
Our proven model does not conclusively show that HubSpot 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. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss per share of 71 cents. Hence, the difference is 0.00%.
Zacks Rank: HubSpot’s Zacks Rank #3 (Hold) 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 a few companies worth considering which, as per our model, have the right combination of elements to post an earnings beat this quarter:
NVIDIA Corporation (NVDA), with an Earnings ESP of +3.45% and a Zacks Rank #2 (Buy).
Demandware, Inc. (DWRE), with an Earnings ESP of +25.00% and a Zacks Rank #3.
Criteo SA (CRTO), with an Earnings ESP of +4.00% and a Zacks Rank #3.
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