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Raven (RAVN) Q3 Earnings: What Lies Ahead for the Stock?

Industrial goods manufacturer Raven Industries, Inc.RAVN is scheduled to report third-quarter fiscal 2018 results after the closing bell on Nov 20, 2017. Last quarter, the company delivered a positive earnings surprise of 4.6%. Raven beat earnings estimates twice in a row in the trailing four quarters, with a positive earnings surprise of 15.4%.

Let's see how things are shaping up for this announcement.

Key Factors to Consider

Raven anticipates exceeding prior-year sales and adjusted operating income in fiscal 2018. In applied technology, the company is increasing market share through technological advancements. Through sustained funding of key R&D projects over the last few years, it introduced two significant new products - Hawkeye nozzle control system and next-generation rate control system. These products are getting favorable customer feedback, generating strong demand and are likely to translate in to higher revenues in the to-be-reported quarter.

The acquisition of Colorado Lining International, Inc. has further augmented the company's geomembrane business through extended service and product offerings. These include the addition of new product designs and installation service components to Raven's portfolio. The transaction will enable Raven Engineered Films to transform into a vertically-integrated, full-service solutions provider for the geomembrane sector. The acquisition will also help Raven to increase its physical presence by operating facilities in four states, namely South Dakota, Colorado, California and Texas, thereby optimizing its resources and expanding customer services and logistics.

Earnings Whispers

Our proven model does not conclusively show that Raven is likely to beat earnings this quarter as it does not possess the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and Zacks Consensus Estimate, is -6.25%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Raven Industries, Inc. Price and EPS Surprise

Raven Industries, Inc. Price and EPS Surprise | Raven Industries, Inc. Quote

Zacks Rank: Raven has a Zacks Rank #3. While this increases the predictive power of ESP, we need to have a positive ESP to be confident about an earnings surprise.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Micron Technology Inc. MU has an Earnings ESP of +2.28% and sports a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

The J. M. Smucker Company SJM has an Earnings ESP of +0.62% and a Zacks Rank #3.

Ollie's Bargain Outlet Holdings, Inc. OLLI has an Earnings ESP of +0.69% and a Zacks Rank #3.

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Ollie's Bargain Outlet Holdings, Inc. (OLLI): Free Stock Analysis Report

Raven Industries, Inc. (RAVN): Free Stock Analysis Report

J.M. Smucker Company (The) (SJM): Free Stock Analysis Report

Micron Technology, Inc. (MU): 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 Nasdaq, Inc.


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

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