Looking for a stock that might be in a good position to beat earnings at its next report? Consider Mellanox Technologies, Ltd.MLNX , a firm in the Electronics - Semiconductors 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, MLNX has beaten estimates by at least 10% in both cases, suggesting it has a nice short-term history of crushing expectations.
Earnings in Focus
Two quarters ago, MLNX expected to post 64 cents per share, while it actually produced 71 cents per share, a beat of 10.9%. Meanwhile, for the most recent quarter, the company looked to deliver 68 cents per share, when it actually saw 82 cents per share instead, representing a 20.6% positive surprise.
Mellanox Technologies, Ltd. Price and EPS Surprise
Thanks in part to this history, recent estimates have been moving higher for Mellanox Technologies. In fact, the Earnings ESP for MLNX 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 MLNX, as the firm currently has a Zacks Earnings ESP of 7.06%, so another beat could be around the corner.
This is particularly true when you consider that MLNX has a great Zacks Rank #1 (Strong Buy) which can be a harbinger of outperformance and a signal for a strong earnings profile. You can see the complete list of today's Zacks #1 Rank stocks here .
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 MLNX could see another beat at its next report, especially if recent trends are any guide.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.