Markets

Will Tessera Technologies (TSRA) Surprise in Q4 Earnings?

Tessera Technologies Inc.TSRA is set to report fourth-quarter 2016 results on Feb 22. Last quarter, it posted a positive earnings surprise of 15.22%.

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

Coming to the price performance, over the past one year, shares of Tessera Technologiesoutperformed the Zacks categorized Electronics Manufacturing Machinery industry. While the industry gained 51.40%, the stock returned 55.80%.

Factors at Play

The leading chip packaging and interconnect solutions provider posted decent third-quarter results with the bottom line outperforming the Zacks Consensus Estimate while the top line matched the same.

The company's premium imaging technology continues to see interest thereby indicating that the business will grow significantly in the mobile and adjacent markets. Also, Tessera has intensified its Invensas, FotoNation and IP licensing efforts and is currently working with a number of semiconductor manufacturers and OSATs to enhance its portfolio of technologies.

In addition, the company is making good progress on the SOC front and its IPU architecture is creating interest among several Asia-based SOC providers. Tessera also continues to create advanced and intelligent automotive application solutions.

These factors put together should help the company report decent results in the upcoming quarter. However, increasing competition, pricing strategy and customer concentration remain major concerns.

In the to-be-reported quarter, management expects revenues between $70 million and $74 million and non-GAAP EPS of 60-65 cents.

Earnings Whispers

Our proven model does not conclusively show that Tessera Technologieswill 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 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 57 cents. Therefore, the Earnings ESP for the company is 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Tessera carries a Zacks Rank #3 which when combined with a 0.00% ESP 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.

Tessera Holding Corporation Price and EPS Surprise

Tessera Holding Corporation Price and EPS Surprise | Tessera Holding Corporation Quote

Stocks to Consider

You can consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank:

WPX Energy, Inc. WPX , with an Earnings ESP of +11.77% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Trinseo S.A. TSE , with an Earnings ESP of +5.30% and a Zacks Rank #2.

Jack in the Box Inc. JACK , with an Earnings ESP of +2.42% and a Zacks Rank #2.

The Best Place to Start Your Stock Search

Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks - absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Tessera Holding Corporation (TSRA): Free Stock Analysis Report

Trinseo S.A. (TSE): Free Stock Analysis Report

Jack In The Box Inc. (JACK): Free Stock Analysis Report

WPX Energy, Inc. (WPX): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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.

In This Story

JACK TSE WPX

Other Topics

Earnings Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More