Web.com Group, Inc.WEB is scheduled to release first-quarter 2017 earnings on May 4. In the last quarter, the company reported a negative earnings surprise of 38.6%. We note that over the trailing four quarters, the company delivered positive earnings surprises thrice and negative surprise once. Despite this, it has an average negative surprise of 0.15%.
Let's see how things are shaping up for this announcement.
Factors to Consider
Web.com is actively ramping up its portfolio of high quality security products in a bid to enhance online security of customers. This augurs well for the company, bringing in more subscribers for its services and impacting the top line in a positive manner.
During fourth-quarter 2016, Web.com announced the acquisition of Latin America-based, web hosting and domain registration firm - Donweb.com - to accelerate its overseas expansion. Web.com has been undertaking strategic acquisitions to boost its operations. It had earlier acquired one of the foremost providers of cloud-based marketing solutions for SMBs, Yodle. We believe that the aforementioned acquisitions will positively impact Web.com's overall first-quarter performance.
For first-quarter 2017, Web.com projects non-GAAP revenues to be approximately $181-$184 million.
Web.com Group, Inc. Price and EPS Surprise
Our proven model does not conclusively show that Web.com will beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: Web.com's Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 57 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Zacks Rank: Web.com carries a Zacks Rank #3, which when combined with an Earnings ESP of 0.00%, makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:
EGain Corp. EGAN , with an Earnings ESP of +50.00% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .
Vishay Intertechnology, Inc. VSH , with an Earnings ESP of +4.35% and a Zacks Rank #2.
Square Inc. SQ , with an Earnings ESP of +12.50% 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 Nasdaq, Inc.