Why Quality Distribution (QLTY) Could Beat Earnings Estimates Again

Zacks

Looking for a stock that might be in a good position to beat earnings at its next report? Consider Quality Distribution Inc. (QLTY), a firm in the Transport-Truck 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, QLTY 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, QLTY expected to earn 11 cents per share, while it actually produced earnings of 14 cents per share, a beat of 27.3%. Meanwhile, for the most recent quarter, the company looked to deliver earnings of 20 cents per share, when it actually saw earnings of 22 cents per share instead, representing a 10% positive surprise.

Thanks in part to this history, recent estimates have been moving higher for Quality Distribution. In fact, the Earnings ESP for QLTY 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 QLTY, as the firm currently has a Zacks Earnings ESP of 4.76%, so another beat could be around the corner.

This is particularly true when you consider that QLTY 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 QLTY could see another beat at its next report, especially if recent trends are any guide.

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