Is Starz (STRZA) Geared Up to Surprise This Earnings Season? - Analyst Blog


Starz ( STRZA ) is set to release its second-quarter 2014 results before the opening bell on Jul 31, 2014.

In the last quarter, the company delivered a 5.66% earnings surprise with positive earnings surprises in three of the last four quarters of an average beat of 16.25%. Let's see how things are shaping up for this announcement.

Factors to Consider This Quarter

Starz has a strong portfolio of original TV shows which has positioned the company as an original content premium cable channel. Moreover, ratings improvement along with subscriber growth will likely spur growth for the company in the coming quarters.

On the flip side, rising distribution expenses, stiff competition from other original content providers and a saturated U.S. cable TV industry will continue to act as headwinds for the company.

Earnings Whispers 

Our proven model does not conclusively show that Starz is likely to beat the Zacks Consensus Estimate 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. Also note that stocks with a

Negative Zacks ESP: This is because the Most Accurate Estimate stands at 48 cents while the Zacks Consensus Estimate is higher at 50 cents. This leads to an ESP of -4.00% for Starz.

Zacks Rank #3 (Hold): Starz carries a Zacks Rank #3 (Hold) which when combined with a  -4.00% ESP makes surprise prediction difficult .

Other Stocks to Consider

Here are some other companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.

Discovery Communications, Inc. ( DISCA ) has an earnings ESP of +1.09% and a Zacks Rank #3.

Live Nation Entertainment, Inc. ( LYV ) has an earnings ESP of +31.25% and a Zacks Rank #3.

Six Flags Entertainment Corp. ( SIX ) has an earnings ESP of +0.65% and a Zacks Rank #3.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: STRZA , DISCA , SIX , LYV

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