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Why the Earnings Streak Will Continue for EarthLink Holdings (ELNK) - Tale of the Tape

Looking for a stock that might be in a good position to beat earnings at its next report? Consider EarthLink Holdings Corp. ( ELNK ), a firm in the IT Services industry, which could be a great candidate for another beat.

This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, ELNK has beaten estimates by at least 40% in both cases, suggesting it has a nice short-term history of crushing expectations.

Earnings in Focus

Two quarters ago, (ELNK) expected to incur a loss of 17 cents per share, while it actually suffered a loss of 10 cents per share, a beat of 41.18%. Meanwhile, for the most recent quarter, the company looked to incur loss of 13 cents per share, when it actually incurred loss of 3 cents per share instead, representing a 76.92% positive surprise.

Thanks in part to this history, recent estimates have been moving higher for EarthLink Holdings. In fact, the Earnings ESP for ELNK is positive, which is a great sign of a coming beat.

After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company's earnings prospects. This is the case for ELNK, as the firm currently has a Zacks Earnings ESP of 6.67%, so another beat could be around the corner.

This is particularly true when you consider that ELNK has a great Zacks Rank #2 (Buy) which can be a harbinger of outperformance and a signal for a strong earnings profile. And when you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that ELNK could see another beat at its next report, especially if recent trends are any guide.

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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.