Looking for a stock that might be in a good position to beat earnings at its next report? Consider NeoPhotonics Corporation (NPTN), a firm in the Semi-Communications industry, which could be a great candidate for another beat.
This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, NPTN has beaten estimates by at least 100% in both cases, suggesting it has a nice short-term history of crushing expectations.
Earnings in Focus
Two quarters ago, NPTN expected to incur a loss of 10 cents per share, while it actually produced earnings of 13 cents per share, a beat of more than 100%. Meanwhile, for the most recent quarter, the company looked to incur loss of 6 cents per share, when it actually saw earnings of 6 cents per share instead, representing a positive surprise of more than 100%.
Thanks in part to this history, recent estimates have been moving higher for NeoPhotonics. In fact, the Earnings ESP for NPTN is positive, which is a great sign of a coming beat.
After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company’s earnings prospects. This is the case for NPTN, as the firm currently has a Zacks Earnings ESP of 9.09%, so another beat could be around the corner.
This is particularly true when you consider that NPTN has a great Zacks Rank #1 (Strong Buy) which can be a harbinger of outperformance and a signal for a strong earnings profile. And when you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that EA could see another beat at its next report, especially if recent trends are any guide.
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