Earnings Estimates Moving Higher for Vanda (VNDA): Time to Buy?
We are in the thick of second-quarter earnings season, which is showing overall growth. Per the latest Earnings Preview, 265 S&P 500 companies (collectively accounting for 66.2% of the index’s total market capitalization) have already reported quarterly results.
Total earnings of these companies increased 23.6% from the same period last year on 10.1% higher revenues, with 80.8% beating EPS estimates and 72.1% surpassing revenue expectation. Total second-quarter 2018 earnings are expected to be up 23.6% on 8.8% higher revenues.
Technology is one of the sectors anticipated to report double-digit earnings growth in the second quarter. The sector that is highly dependent on semiconductors and electronic designs, as well as instruments and equipment continues to benefit from growing adoption of augmented reality (AR)/virtual reality (VR) devices, emerging trends of artificial intelligence (AI), machine learning, cloud computing, autonomous vehicles and IoT services.
All these factors are aiding growth of the Electronic industry, which is currently riding on the ongoing technical advancement in internet infrastructure and the telecommunication sector worldwide. Moreover, increasing usage of electronic devices in healthcare, aerospace & defense, and consumer sectors continues to benefit the industry.
Our research shows that when a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) stock is combined with a positive Earnings ESP, the chance of beating earnings estimates is high. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Let’s take a look at four technology companies that are set to reportsecond-quarter numbers on Aug 1.
Garmin Ltd.’s GRMN focus on continued innovation, diversification and market expansion to explore growth opportunities in all its business segments will help drive top-line growth. However, macroeconomic challenges remain part of the operating environment.
Notably, the company has a record of delivering positive earnings surprise in the trailing four quarters, with an average beat of 12.3%.
Currently, Garmin has a Zacks Rank #2 and an Earnings ESP of 0.00%, which does not indicate a likely positive surprise.
Garmin Ltd. Price and EPS Surprise
Garmin Ltd. Price and EPS Surprise | Garmin Ltd. Quote
Trimble Inc.’s TRMB initiatives to lower the cost structure, increased adoption of technology in the agricultural market, product enhancements and international expansion should drive growth in the to-be-reported quarter.
Notably, the company delivered positive earnings surprise in the trailing four quarters, with an average beat of 8.08%.
For the second quarter, management expects non-GAAP earnings between 42 cents and 46 cents per share, and revenues within $755-$785 million. Non-GAAP operating margin in the second quarter is anticipated in the range of 18-19%.
Trimble has a Zacks Rank #2 and an Earnings ESP of -1.12%, which does not indicate a likely positive earnings surprise in the quarter to be reported. You can see the complete list of today’s Zacks #1 Rank stocks here.
Trimble Inc. Price and EPS Surprise
Trimble Inc. Price and EPS Surprise | Trimble Inc. Quote
Littelfuse, Inc. LFUS delivered positive earnings surprise in the trailing two quarters, with an average beat of 9.93%. Also, Littelfuse has an Earnings ESP of +0.33% and carries a Zacks Rank #3, which indicates a likely positive surprise.
For the second quarter, management expects net sales in the range of $450-$462 million and adjusted diluted earnings per share within $2.39-$2.53, up 17% year over year.
Littelfuse, Inc. Price and EPS Surprise
Littelfuse, Inc. Price and EPS Surprise | Littelfuse, Inc. Quote
Generac Holdings Inc. GNRC, a manufacturer of backup power generation products for serving residential, light commercial and industrial markets, delivered positive earnings surprise in the trailing four quarters, with an average of 10.53%. Generac Holdings has a Zacks Rank #3 and an Earnings ESP of +3.26%, which indicates a likely positive earnings surprise in the to-be-reported quarter.
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.
Generac Holdlings Inc. Price and EPS Surprise
Generac Holdlings Inc. Price and EPS Surprise | Generac Holdlings Inc. Quote
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