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What's in Store for Workiva (WK) this Earnings Season? - Analyst Blog

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Workiva Inc.WK is scheduled to report second-quarter 2015 results on Aug 5. Last quarter, the company posted loss per share of 19 cents, narrower than the Zacks Consensus Estimate of a loss of 25 cents.

Let us see how things are shaping up for this announcement.

Factors to Consider

Workiva offers a cloud-based, mobile-enabled platform for enterprises to collect, manage, report and analyze critical business data in real time. The exponential increase in the amount of data, complexity of data formats and the need to scale resources at regular intervals compelled several companies to turn to cloud computing vendors.

Cloud computing consists of the entire gamut of computing intelligence required to carry out day-to-day operations by companies and professionals. This basically means that other than the hardware, which could be of any shape or form, all the supporting technology involved in creating, storing, retrieving, transporting, protecting, sorting, processing, analyzing and presenting information from multiple sources and formats, which when available from a shared (private) or public pool, could be referred to as cloud computing.

Cloud service providers therefore help organizations to store data and applications remotely in this pool, which can be accessed from anywhere, anytime via the Internet. Therefore, users can access their files and settings from any connected device.

Given its scope and advantages (cost, scaling, convenience, etc), it is not surprising that the demand for cloud computing software and applications is on the rise. Cloud vendors usually offer the infrastructure or other technology as a service, which further reduces the costs for users.

According to Centaur Partners, the Software-as-a-Service (SaaS) and cloud-based business applications are likely to grow from $13.5 billion in 2013 to $32.8 billion in 2016, reflecting a compounded annual growth rate (CAGR) of 19.5%. Moreover, Computerworld forecasts that 42% IT decision makers are planning to increase cloud computing budget in 2015.

We believe that the increasing mainstream adoption of cloud-based solutions will positively impact Workiva's second-quarter results.

However, an uncertain economic environment, currency headwinds and competition remain the concerns for the to-be-reported quarter.

Earnings Whispers

Our proven model does not conclusively show that Workiva will beat earnings this quarter. That is because 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. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 31 cents per share. Hence, the difference is 0.00%.

Zacks Rank: Workiva currently has a Zacks Rank #2 which when combined with 0.00% ESP makes surprise prediction difficult.

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

Stocks to Consider

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

Amtech Systems Inc. ASYS , with an Earnings ESP of +8.00% and a Zacks Rank #3.

SunEdison Inc. SUNE , with an Earnings ESP of +13.33% and a Zacks Rank #3.

2U Inc. TWOU , with an Earnings ESP of +3.57% and a Zacks Rank #3.

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AMTEC SYSTEMS (ASYS): Free Stock Analysis Report

SUNEDISON INC (SUNE): Free Stock Analysis Report

WORKIVA INC (WK): Free Stock Analysis Report

2U INC (TWOU): 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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