Will Lions Gate (LGF) Beat Earnings Estimates? - Analyst Blog


We expect Lions Gate Entertainment Corp. ( LGF ), producer and distributor of motion pictures for theatrical and straight-to-video release, to beat expectations when it reports fourth-quarter fiscal 2014 results on May 29, 2014. In the last quarter, it posted a positive surprise of 15.7%.

Why a Likely Positive Surprise?

Our proven model shows that Lions Gate is likely to beat earnings because it has the right combination of two key components.  

Positive Zacks ESP: Lions Gate currently has an Earnings ESP of +2.56%. This is because the Most Accurate estimate stands at 40 cents, while the Zacks Consensus Estimate is pegged at 39 cents.

Zacks Rank #3 (Hold): Note that stocks with Zacks Ranks of #1, 2 and 3 have a significantly higher chance of beating earnings estimates. Stocks with Zacks Rank #4 and 5 (Sell-rated stocks) should never be considered going into an earnings announcement.

The combination of Lions Gate' Zacks Rank #3 and +2.56% ESP makes us very confident regarding a positive earnings beat on May 29.

What is Driving the Better-than-Expected Earnings?

With a strong track record of producing small and mid-budget specialty films, Lions Gate is well positioned to increase market share, maximize return and build a diversified portfolio, through strategic acquisitions and alliances. To participate in the growing trend among consumers of accessing films over the Internet, Lions Gate has purchased interests in alternative distribution channels.

The company, in the last four quarters, has outperformed the Zacks Consensus Estimate by an average of 119.7%.

Stocks that Warrant a Look

Here are some other companies you may want to consider as our model shows they have the right combination of elements:

Sanderson Farms, Inc. ( SAFM ) has an Earnings ESP of +2.44% and a Zacks Rank #1 (Strong Buy).

HD Supply Holdings, Inc. ( HDS ) has an Earnings ESP of +11.77% and a Zacks Rank #3 (Hold).

Cabela's Incorporated ( CAB ) has an Earnings ESP of +5.88% and a Zacks Rank #3 (Hold).

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HD SUPPLY HLDGS (HDS): Free Stock Analysis Report

LIONS GATE ETMT (LGF): Free Stock Analysis Report

SANDERSON FARMS (SAFM): Free Stock Analysis Report

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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: CAB , HDS , LGF , SAFM



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