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DHI Group (DHX) to Report Q4 Earnings: What's in the Offing?

Zacks Equity Research

DHI Group, Inc. DHX is scheduled to report fourth-quarter 2018 results on Feb 7.

In the last reported quarter, the company’s earnings per share of 6 cents surpassed the Zacks Consensus Estimate of 5 cents.

Revenues of $39 million matched the consensus estimate but reflected a year-over-year decline of 26%.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 6 cents, indicating relatively flat earnings on a year-over-year basis. Revenues are estimated to be around $37.9 million, indicating a 25.58% decline.

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

DHI Group, Inc. Price and EPS Surprise

DHI Group, Inc. Price and EPS Surprise | DHI Group, Inc. Quote

Factors at Play

DHI’s focus on improving its products with the addition of new features, functionality and tools is leading to better outcomes for clients. Change in its sales strategy coupled with the work it is doing to rationalize its expense base is helping it improve fundamentals.

Stringent cost control activities are expected to continue aiding the company’s margins. Further, the company’s efforts to wind down or divest certain areas of the business and reallocate the resources to high-growth areas is helping it slowdown the rate of revenue decline.

ClearanceJobs, a tech-brand of DHI, is a major growth driver for the company. It has witnessed consistent year-over-year growth of 20% and above for the past 11 consecutive quarters. This trend is likely to continue aiding the company’s top line.

However, the number of customer accounts in the Dice brand has not seen significant growth for the past three quarters, despite some high-value clients included in the mix, possibly due to the lack of growth in direct hire employers. This is likely to remain an overhang.

Also, due to seasonality, new customer additions are expected to have slowed down in the fourth quarter.

What the Zacks 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. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

DHI has a Zacks Rank #2 and an Earnings ESP of 0.00%.

Stocks to Consider

Here are a few stocks that you may consider as our model shows that these have the right combination of elements to post an earnings beat in its upcoming release:

Archer Daniels Midland Company ADM has an Earnings ESP of +2.45% and sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

GTT Communications, Inc. GTT has an Earnings ESP of +173.53% and carries a Zacks Rank of 2.

Science Applications International Corporation SAIC has an Earnings ESP of +0.99% and carries a Zacks Rank of 2.

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