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Attunity (ATTU) Gears Up for Q4 Earnings: What's in Store?

Zacks Equity Research

Attunity Ltd. ATTU is set to report fourth-quarter 2018 results on Jan 31.

The company beat the Zacks Consensus Estimate in two out of the trailing four quarters, delivering average positive surprise of 235.6%.

In the last reported quarter, the company reported earnings of 20 cents per share compared with 4 cents in the year-ago quarter. Moreover, the figure comfortably surpassed the Zacks Consensus Estimate by 17 cents.

Revenues increased 35% year over year to $22.2 million and came ahead of the Zacks Consensus Estimate of $19 million.

The Zacks Consensus Estimate for fourth-quarter earnings and revenues is pegged at 9 cents and $24 million, respectively.

Let’s see how things are shaping up for the upcoming announcement.

Attunity Ltd. Price and EPS Surprise

Attunity Ltd. Price and EPS Surprise | Attunity Ltd. Quote

Key Factors to Watch Out

Attunity is likely to perform well on the back of strong demand for term licenses and portfolio strength. Moreover, increasing enterprise adoption of cloud as a platform for analytics, Data Lake and artificial intelligence (AI) bodes well for the company. Accelerating demand for Data Lake solutions that deliver real-time data and are suitable for large scale deployments is a key catalyst.

Further, the company’s strengthening partnerships with major cloud platform providers, Microsoft Azure, Google Cloud and Amazon Web Services (AWS), are expected to boost Attunity’s top line in the to-be reported quarter.

Portfolio strength and partnerships are helping Attunity win deals. In December, the company signed a strategic license and services agreement with a large European Bank worth $1 million.

Most recently, the company won a $1.4 million term-based deal with Global 2000 energy company to enable strategic cloud Data Lake on Microsoft Azure.

During the last quarter, Attunity launched a new solution to automate streaming data pipelines on AWS. The new offering not only makes the solution more valuable for customers but also bolsters the company’s relation with AWS.

In the last reported quarter, Attunity witnessed a 40% sequential increase in term-based license model. Notably, management expects an increase in adoption of term-based model to generate significant recurring revenues for the company.

The company is also benefiting from solid large deals across geographies including Americas, EMEA, and APAC regions.

However, expenses increased primarily due to the addition of new hires and expansion of the company’s marketing activities. This is expected to keep the margins under pressure.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Currently, Attunity has a Zacks Rank #2 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With a Favorable Combination

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Twitter, Inc. TWTR has an Earnings ESP of +13.03% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Square, Inc. SQ has an Earnings ESP of +6.6% and a Zacks Rank #2.

Lumentum Holdings Inc. LITE has an Earnings ESP of +1.1% and a Zacks Rank #2.

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