U.S. markets open in 1 hour 55 minutes

Analysts Estimate Ceva (CEVA) to Report a Decline in Earnings: What to Look Out for

Zacks Equity Research

The market expects Ceva (CEVA) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended December 2019. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.

The earnings report, which is expected to be released on February 18, 2020, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.

Zacks Consensus Estimate

This chip designer is expected to post quarterly earnings of $0.21 per share in its upcoming report, which represents a year-over-year change of -8.7%.

Revenues are expected to be $24.48 million, up 14.4% from the year-ago quarter.

Estimate Revisions Trend

The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Price, Consensus and EPS Surprise

Earnings Whisper

Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Ceva?

For Ceva, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%.

On the other hand, the stock currently carries a Zacks Rank of #1.

So, this combination makes it difficult to conclusively predict that Ceva will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?

While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Ceva would post earnings of $0.16 per share when it actually produced earnings of $0.22, delivering a surprise of +37.50%.

Over the last four quarters, the company has beaten consensus EPS estimates two times.

Bottom Line

An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Ceva doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.


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
 
To read this article on Zacks.com click here.

  • Coronavirus stock market rally triggers the dreaded 'death cross'
    Business
    Yahoo Finance

    Coronavirus stock market rally triggers the dreaded 'death cross'

    The last thing beat-up investors want to see right now is an often dreaded technical formation in the markets. Yet, that's where we are after the S&P 500 has rallied hard off the lows achieved a week ago. For the first time in over a year, the S&P 500 is seeing its 50-day moving average cross below its 200-day moving average (see Yahoo Finance chart below) points out SunDial Capital Research.

  • Ready to buy back into this market? If so, forget about Apple and grab these stocks instead, strategist says
    Business
    MarketWatch

    Ready to buy back into this market? If so, forget about Apple and grab these stocks instead, strategist says

    The market is utterly underestimating how much of a shock the coronavirus is going to be to the economy. And I think for the next 12 months, the U.S. consumer is only going to spend his money or her money on [nondiscretionary] goods. So, within that basket, I think you have to let Apple go.

  • Profit Will Soon Double (Or More) At 11 Companies, Analysts Say
    Business
    Investor's Business Daily

    Profit Will Soon Double (Or More) At 11 Companies, Analysts Say

    Corporate profit is all but certain to drop in the first quarter as the coronavirus shuts America down. But analysts still think profit will double or more at some S&P 500 companies. Double profit?

  • Barrack Says Real Estate Collapse Will Take Hold in April
    Business
    Bloomberg

    Barrack Says Real Estate Collapse Will Take Hold in April

    Real estate billionaire Tom Barrack, Colony Capital's chairman, founder and chief executive officer, talks about the state of the commercial mortgage market and if the Federal Reserve is doing enough to help it. He speaks to Erik Schatzker on "Bloomberg Markets."

  • Mall Owner Taubman To Tenants: Pay Your Rent
    Business
    Benzinga

    Mall Owner Taubman To Tenants: Pay Your Rent

    The real estate investment trust wrote in a March 25 memo obtained by CNBC that the rental income it receives from tenants is "essential" for it to meet its own financial obligations, like paying lenders on mortgages and utility expenses. The Taubman memo reportedly said "all tenants will be expected" to stay true to their original lease obligations, despite financial difficulties related to the coronavirus. So far, restaurant chain Cheesecake Factory Inc (NASDAQ: CAKE) is the most notable national mall tenant to confirm it won't pay rent in April, although the company said it is in various stages of discussions with its landlords.

  • JPMorgan: These 3 Stocks Are Poised to Surge by at Least 35%
    Business
    TipRanks

    JPMorgan: These 3 Stocks Are Poised to Surge by at Least 35%

    JPMorgan's Global Quantitative and Derivatives Strategy team, led by Marko Kolanovic, has been crunching the numbers on the coronavirus pandemic, and found that the forecasts can vary wildly, with predicted economic declines ranging from 20% to 70%, depending on which data the analyst chooses to start with. The JPMorgan report does offer a ray of hope: because the hospital numbers are a lagging indicator, it is possible that the social containment measures have taken hold and brought us closer to the inflection point – and that infection rates will soon start declining. Kolanovic writes, “Taking into account the unprecedented monetary and fiscal measures being implemented, as well as unprecedented asset declines over the past month, we maintain that asset price recovery is likely and our pre-pandemic equity price target for 2020 is achievable sometime in the first half of 2021.”

  • Nightmare Haunting Euro Founders May Be a Reality With Italy
    World
    Bloomberg

    Nightmare Haunting Euro Founders May Be a Reality With Italy

    The longstanding suspicion that Italy's profligate borrowing could ultimately become the whole of Europe's problem was the recurring nightmare of German finance officials throughout the 1990s. Now, as the crisis forces Giuseppe Conte's government to jettison a decade of tightly capped Italian budget deficits, the country's strategy for the future is once again built on piling up debt, sending its public borrowings swelling toward or even beyond 150% of gross domestic product. The upshot is that Italy's finances now depend wholly on the European Central Bank keeping a lid on its borrowing costs.

  • Audacious Chinese coffee chain Luckin, not content in its quixotic battle against Starbucks, dreams of becoming ‘Amazon-like’
    Business
    MarketWatch

    Audacious Chinese coffee chain Luckin, not content in its quixotic battle against Starbucks, dreams of becoming ‘Amazon-like’

    The Chinese startup that has reshaped the coffee sector here, wiping away Starbucks' dominance in the country, is leaping into an untraditional foray — one that is sure to perpetuate questions about its long-term strategy. Nasdaq-listed Luckin Coffee (LK) came out of nowhere in 2017 and swiftly ate into Starbucks' (SBUX) domination of China sales, with its intuitive mobile app, ubiquitous grab-and-go stores, and discounts so deep that they have frustrated some investors. One conspicuous example of Luckin's cutthroat strategy was the building of hundreds of its stores within mere meters of existing Starbucks locations, often right next door.

  • Oil rises after 18-year lows prompt U.S.-Russia talks plan
    Business
    Reuters

    Oil rises after 18-year lows prompt U.S.-Russia talks plan

    Oil prices firmed on Tuesday after U.S. President Donald Trump and Russian President Vladimir Putin agreed to talks aimed at stabilising energy markets, with benchmarks climbing off 18-year lows hit as the coronavirus outbreak cut fuel demand worldwide. Brent crude was up by 61 cents, or 2.7%, at $23.37 a barrel by 0833 GMT, after closing on Monday at $22.76, its lowest finish since November 2002. Oil markets have faced a double whammy from the coronavirus outbreak and a race to win market share between Saudi Arabia and Russia after OPEC and other producers failed to agree on deeper cuts to support oil prices in early March.

  • Stocks rise, oil rebounds as China data boosts virus-hit economy
    Business
    AFP

    Stocks rise, oil rebounds as China data boosts virus-hit economy

    European stock markets extended gains Tuesday after a largely positive showing across Asia and as oil prices rebounded from 18-year lows, with a jump in Chinese factory activity providing a surprise boost for the virus-hit global economy. Around midday, Europe's main stock markets were up more than one percent on average. The dollar was higher, while the euro came under pressure from data showing inflation in the eurozone fell in March on a slump in energy prices caused by the coronavirus outbreak.

  • Challenging Times Ahead for Boeing Stock; 5-Star Analyst Slashes Price Target
    Business
    SmarterAnalyst

    Challenging Times Ahead for Boeing Stock; 5-Star Analyst Slashes Price Target

    It has been a rollercoaster month for investors of beleaguered airline Boeing (BA). Despite the profit potential, the analyst can't quite see his way clear to actually recommending "buying" BA stock, assigning the shares only a "neutral" rating. Questions have been raised concerning Boeing's financial health, following a request for $60 billion in federal aid to assist its ailing ecosystem.

  • Paying $4.79 a Gallon, California Didn’t Get the Cheap Gas Memo
    Business
    Bloomberg

    Paying $4.79 a Gallon, California Didn’t Get the Cheap Gas Memo

    As crude oil prices have tanked, depressed by the coronavirus pandemic and the market-share war between Saudi Arabia and Russia, at least a dozen service stations in the Golden State were charging more than $4 as of Monday, according to the tracker GasBuddy. One unnamed location in Santa Clara, near the heart of Silicon Valley, was demanding the most that GasBuddy's research found in the state: $4.79. According to AAA, only Hawaii had higher average prices than California, at $3.36 versus $3.06.

  • 7 Safe Dividend Plays For 2020
    Business
    Benzinga

    7 Safe Dividend Plays For 2020

    Unable to cough up cash to meet dividend payments at a time when businesses are reeling to keep operations going, several companies have announced suspension of dividends or pauses of stock buybacks. To compare the returns of a stock, a metric called dividend yield is used. Dividend yield is the amount of dividend paid by a company for a year, divided by its current stock price and expressed in percentage terms.

  • Amazon Fires Worker Who Led Strike Over Virus
    Business
    Bloomberg

    Amazon Fires Worker Who Led Strike Over Virus

    “Taking action cost me my job,” Smalls said Monday in a Bloomberg TV interview. A group of workers at the Staten Island fulfillment center walked off the job Monday to demand Amazon close the facility for extended cleaning, the latest in a wave of virus-related protests. In a statement Monday night, New York State Attorney General Letitia James called Smalls' firing “immoral and inhumane.”

  • Huawei warns China will strike back against new U.S. restrictions
    Business
    Reuters

    Huawei warns China will strike back against new U.S. restrictions

    Huawei warned on Tuesday that 2020 would be its most difficult year yet due to American trade restrictions which dealt a blow to its overseas sales in 2019, and predicted the Chinese government would retaliate against the United States. It said Beijing could hit back against U.S. measures to restrict chip sales to Huawei, by restricting sales of American products in China and by shifting to alternative suppliers in China and South Korea. "The Chinese government will not just stand by and watch Huawei be slaughtered on the chopping board," Chairman Eric Xu told reporters at the launch of Huawei's annual report.

  • Business
    Bloomberg

    Larry Fink Sees Economy Recovering From Virus But Forever Transformed

    The pandemic that swept through nations across the globe this year is causing people to re-evaluate “just-in-time” supply chains and dependence on air travel, Fink wrote in his annual letter to shareholders dated Sunday. “In my 44 years in finance, I have never experienced anything like this,” Fink wrote, adding that “as dramatic as this has been, I do believe that the economy will recover steadily, in part because this situation lacks some of the obstacles to recovery of a typical financial crisis.” The spreading coronavirus has infected more than 780,000 people and prompted cities across the world to lock down, threatening deep recessions that will push households and companies to the brink.

  • Here are the best bets for investors seeking income, according to Goldman Sachs
    Business
    MarketWatch

    Here are the best bets for investors seeking income, according to Goldman Sachs

    The stimulus bill signed into law Friday keeps any companies that borrow from the government from paying dividends to shareholders for at least a year after the loan is repaid — even as bond yields have collapsed to to near all-time lows. The provisions of the CARE Act likely exacerbate a trend of companies trying to keep as much cash on hand as possible as the economic downturn worsens. The Goldman strategists estimate dividends for S&P 500 stocks will decline 25% to $44 per share in 2020, and note 12 companies, ranging from Apache Corp. (APA)  to Old Dominion Freight Line (ODFL), have already reduced or suspended their shareholder payouts.

  • China's Lifting of Restrictions Has Worked, Flu Expert Says
    World
    Bloomberg

    China's Lifting of Restrictions Has Worked, Flu Expert Says

    China's lifting of restrictions related to the coronavirus has been successful, according to research by Imperial College in London. "As movement increased and China restarted their economy, we didn't see an increase in transmission," says Dr. Kylie Ainslie, research associate in influenza dynamics in the Department of Infectious Disease Epidemiology at Imperial. She speaks on "Bloomberg Markets: European Open."

  • Still The No. 1 Rule For Stock Market Investors: Always Cut Your Losses Short
    Business
    Investor's Business Daily

    Still The No. 1 Rule For Stock Market Investors: Always Cut Your Losses Short

    And it's especially true when the market is heading into a major correction, such as the coronavirus stock market crash that began on Feb. 25, as the IBD Big Picture column noted the same day. Judo masters begin not by learning how to throw, but how to fall. They practice this skill until it's as natural as breathing.

  • Is Boeing Stock A Buy Right Now? This Is What You Need To Know
    Business
    Investor's Business Daily

    Is Boeing Stock A Buy Right Now? This Is What You Need To Know

    Boeing earnings have evaporated as 737 Max deliveries and production are on hold and the coronavirus's spread hits air travel demand. Is Boeing stock a good buy now? Investors should look at the aerospace giant's fundamentals and the BA stock chart.

  • Business
    Barrons.com

    Warren Buffett’s $10 Billion Bet on Occidental Petroleum Is Looking More Dicey

    (BRKA)'s $10 billion preferred stock investment in (OXY) is looking more troubled. Two Wall Street analysts say that an embattled Occidental (ticker: OXY) may choose to pay the $800 million in annual dividends in stock rather than in cash. Paying the dividend in common stock, as permitted under the terms of the deal, would be dilutive to Occidental.

  • Revisiting Harry Markopolos' Call That 'GE Is One Recession Away From Chapter 11'
    Business
    Benzinga

    Revisiting Harry Markopolos' Call That 'GE Is One Recession Away From Chapter 11'

    Seven months after Bernie Madoff whistleblower Harry Markopolos said General Electric Company (NYSE: GE) would not survive the next U.S. recession, the coronavirus (COVID-19) pandemic has provided a chance to test that thesis. Back in August 2019, Markopolos released a 175-page whistleblower report claiming GE was committing nearly $40 billion in accounting fraud related to its insurance business and its stake in Baker Hughes Co (NYSE: BKR). At the time, Markopolos said GE was a bigger fraud than Enron or WorldCom.

  • Ford And GM Do Not Care Much About Electric Vehicle Production
    Business
    Benzinga

    Ford And GM Do Not Care Much About Electric Vehicle Production

    The promise that electric vehicles (EVs) hold in the automobile market hinges on two major factors – that they will decrease tailpipe emissions and they will be more economical to operate than internal combustion engine (ICE) vehicles. With analysts lowering their outlook for global oil demand in the second quarter of 2020 due to the COVID-19 epidemic, it is certain that the operating cost of ICE vehicles will be comparable to that of EVs. The memo looks to have reached major U.S. auto companies, with detailed production plans for North America showing Ford Motor Company (NYSE: F) and General Motors Company (NYSE: GM) forecasting to produce more than five million SUVs and pickup trucks in 2026, while only planning to make 320,000 EVs the same year.

  • Business
    TheStreet.com

    Amarin Shares Crushed After Judge Rules Heart Drug Patents Invalid: Report

    Shares of Amarin lost more than half their value in after-hours trading Monday after a federal judge ruled patents on one of its medications were invalid, according to a published report. Amarin shares fell $9.08, or 67%, to $4.50 in after-hours action. The slide comes after a federal judge in Nevada found that patents on Amarin's Vascepa drug were invlaid, STAT reported.

  • Investors shouldn't let a stock market sucker's rally fool them
    Business
    Yahoo Finance

    Investors shouldn't let a stock market sucker's rally fool them

    The sucker's rally on Wall Street is in full effect in large part because Wall Street's powerful high-speed trading computers are completely mentally detached from the harsh realities breaking out on Main Street during the coronavirus pandemic. So in short, consider fading last week's rip in equities. But oh what a rip higher it was, folks, as traders got their pounds of flesh from the Federal Reserve (unlimited QE program) and government (a $2 trillion-plus fiscal relief package).