Will Q4 Earnings Hold a Surprise for Nielsen (NLSN) Stock?

Nielsen HoldingsplcNLSN is set to report fourth-quarter 2016 results on Feb 9. Last quarter, the company posted a positive earnings surprise of 2.78%. Nielsen also surpassed the Zacks Consensus Estimate in three out of the last four quarters, with an average positive surprise of 1.81%.

Over the last one year, shares of Nielsen have underperformed the Zacks characterized Business Information Services industry. The stock has registered a loss of 5.08% compared with the industry's gain of 20.38%.

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

Factors at Play

Nielsen is an information and measurement company which offers media and marketing information on what consumers watch and buy on a global and local basis. The company reported decent fourth-quarter results, with the bottom line beating the Zacks Consensus Estimate and the top line missing the same.

However, revenues of $1.57 billion were up 2.5% year over year on the back of solid performance by the company's Buy and Watch business lines.

Regular dividend payment and share repurchase programs reflect Nielsen's financial strength and commitment to return value to shareholders. Also, the company's new products are doing well and should drive revenues in the upcoming results.

However, continued investments in technology and infrastructure could weigh on margins and profitability in the to-be-reported quarter.

Earnings Whispers

Our proven model does not conclusively show that Nielsen is likely to beat on 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 77 cents. Therefore, Earnings ESP for Nielsen is 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank : Nielsenhas a Zacks Rank #5 (Strong Sell). 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.

Nielsen N.V. Price and EPS Surprise

Nielsen N.V. Price and EPS Surprise | Nielsen N.V. Quote

Stocks to Consider

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

Applied Optoelectronics AAOI with an Earnings ESP of +15.87% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

ACI Worldwide ACIW with an Earnings ESP of +1.89% and a Zacks Rank #3.

Applied Materials AMAT with an Earnings ESP of +6.06% and a Zacks Rank #3.

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Nielsen N.V. (NLSN): Free Stock Analysis Report

ACI Worldwide, Inc. (ACIW): Free Stock Analysis Report

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Applied Materials, Inc. (AMAT): 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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