U.S. Markets closed

OFS Capital (OFS) to Report Q4 Results: Wall Street Expects Earnings Growth

Zacks Equity Research

The market expects OFS Capital (OFS) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended December 2018. 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 stock might move higher if these key numbers top expectations in the upcoming earnings report. 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 management investment company is expected to post quarterly earnings of $0.34 per share in its upcoming report, which represents a year-over-year change of +17.2%.

Revenues are expected to be $11.25 million, up 35.7% 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 the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.

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 OFS Capital?

For OFS Capital, 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 #3.

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

Does Earnings Surprise History Hold Any Clue?

Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. 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 OFS Capital would post earnings of $0.34 per share when it actually produced earnings of $0.35, delivering a surprise of +2.94%.

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.

OFS Capital 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
 
OFS Capital Corporation (OFS) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.

  • Elon Musk Calls Bill Gates Underwhelming After Billionaire Buys a Porsche
    Business
    Bloomberg

    Elon Musk Calls Bill Gates Underwhelming After Billionaire Buys a Porsche

    If he was expecting kind words in return from Elon Musk, he apparently shouldn't have spoken about challenges that still lie ahead -- or about his new Porsche. Gates, the billionaire co-founder of Microsoft Corp., spoke with a YouTube influencer last week about the challenges of reducing emissions to slow climate change. “And certainly Tesla, if you had to name one company that's helped drive that, it's them,” Gates told YouTuber Marques Brownlee.

  • Billionaire Ray Dalio Pulls the Trigger on 3 “Strong Buy” Stocks
    Business
    TipRanks

    Billionaire Ray Dalio Pulls the Trigger on 3 “Strong Buy” Stocks

    On top of this, he pointed out, “Debunking 'too big to grow fears,' BLK delivered 7%-plus organic asset growth for the full year 2019, which is an acceleration from 2.1%-plus organic growth in 2018 and 4.3%-plus average growth rate over last five years. Importantly, strong net new money growth translated into 5% organic base fee growth in 2019, better than the 2% growth in 2018. Based on this report, Cyprys expects other analysts to make adjustments to their outlooks for 2020.

  • The Wuhan Virus and Research-Focused Biotech Companies
    World
    GuruFocus.com

    The Wuhan Virus and Research-Focused Biotech Companies

    The problem with these companies is that their low or nonexistent revenues result in a weak investor perception as the qualitative benefits of their research cannot be measured tangibly. However, with the outbreak of the Wuhan coronavirus, the importance of investing in the research of such companies is suddenly a hot topic in the investor community, which is why many of these stocks have seen their prices rise. Warning!

  • The hedge-fund investor who has beaten Warren Buffett by 200x likely made a killing on Tesla
    Business
    MarketWatch

    The hedge-fund investor who has beaten Warren Buffett by 200x likely made a killing on Tesla

    Renaissance Technologies, added more than 3 million shares of Tesla to its holdings in the fourth quarter of last year, as the electric-vehicle maker's shares catapulted higher, according to public filings. The hedge fund founded by James Simons, considered the premiere quantitative-driven investor, owned 3.9 million shares of Tesla at the end of Dec. 31, with the company's stake in Renaissance's portfolio jumping from 0.1% in the prior quarterly period to 1.3%, according to file-tracking site Whalewisdom. The purchases would have come as Tesla's shares (TSLA) were zooming higher, punishing a number of investors with short positions who had bet that the Elon Musk-run Silicon Valley darling would see its price collapse soon.

  • Walmart expects to save $60 million annually on shopping bags
    Business
    MarketWatch

    Walmart expects to save $60 million annually on shopping bags

    Walmart Inc. is saving big bucks on an unexpected part of the business: shopping bags. The world's largest company by revenue expects to save $60 million annually on plastic shopping bags, “just by changing our buying process and better utilizing our scale,” Chief Financial Officer Brett Biggs said. The remarks were made after the retail giant announced its fourth-quarter earnings on Tuesday.

  • InMode Reverses Lower
    Business
    Investor's Business Daily Video

    InMode Reverses Lower

    InMode reported strong earnings, sales and guidance … but after surging at the open shares reversed lower. Has a 53.30 cup-with-handle buy point. Looked like an early entry at the open – but good idea to wait 5 minutes or even for topping first-hour high, especially with a volatile IPO like INMD.

  • Boeing finds debris in 737 MAX jetliners - company memo
    Business
    Reuters

    Boeing finds debris in 737 MAX jetliners - company memo

    Boeing Co found debris that could pose potential safety risks in the fuel tanks of several 737 MAX aircraft that are in storage and waiting to be delivered to airlines, according to an internal memo seen by Reuters on Tuesday. Foreign object debris, an industrial term for rags, tools, metal shavings and other materials left behind by workers during the production process, has been a quality control issue for various Boeing aircraft, such as its KC-46 tankers. Mark Jenks, general manager of the 737 programme, told employees in the memo that such debris was "absolutely unacceptable" and that the company was taking steps to address the issue in its production system.

  • Bloomberg's new plan to crack down on Wall Street includes a financial transaction tax
    Business
    Yahoo Finance

    Bloomberg's new plan to crack down on Wall Street includes a financial transaction tax

    Bloomberg has been campaigning as a more moderate alternative to candidates like Sen. Elizabeth Warren (D-MA) and Sen. Bernie Sanders (I-VT) and has been courting business leaders and Wall Street executives — who will likely cringe at the idea of a financial transaction tax. But the more progressive wing of the party has championed even tougher regulations and taxes on Wall Street on the wealthiest Americans. Bloomberg's financial transaction tax would be phased in gradually, starting at 0.02% to “monitor and minimize unintended consequences.

  • Leon Cooperman's Top 6 Buys for the 4th Quarter
    Business
    GuruFocus.com

    Leon Cooperman's Top 6 Buys for the 4th Quarter

    GuruFocus ranks Ferro's profitability 7 out of 10: operating margins have expanded over the past five years despite outperforming just 57.46% of global competitors. Additionally, Ferro's three-year revenue growth rate of 15.90% outperforms 77.69% of global chemical companies. Mario Gabelli (Trades, Portfolio) also has a holding in Ferro.

  • Business
    GuruFocus.com

    SpaceX: Starlink IPO Should See Hope Trump Economics

    GuruFocus has detected 8 Warning Signs with IRDM. Click here to check it out. IRDM 30-Year Financial Data The intrinsic value of IRDM Peter Lynch Chart of IRDM An expensive endeavor Musk made Starlink the key pillar of his pitch to investors during SpaceX's most recent funding round, espousing his belief that it will be the profit engine that will drive the company's more ambitious, but less lucrative, pursuits.

  • Business
    TheStreet.com

    How Much Do Doctors Make?

    Doctors adhere to the Hippocratic Oath, which stems from Greek medical history, and calls for physicians to swear to uphold the highest ethical standards in the service of medicine. The numbers do vary for the average physician salary, depending on the source of the information. Data from ZipRecruiter notes the average annual pay for a "medical doctor" stands at $224,190 in 2018, with the highest salaries in the $397,000 range and on the lower end at $23,500.

  • 10 Stocks' Profit Will Soar More Than Anyone Dreamed, Analysts Say
    Business
    Investor's Business Daily

    10 Stocks' Profit Will Soar More Than Anyone Dreamed, Analysts Say

    Analysts' forecast for S&P 500 profit for 2020 has declined all year, says FactSet. Digging further shows you just how much. Analysts Souring On S&P 500 Earnings Most S&P 500 companies are expected to make less than thought in 2020, not more.

  • Roku, Inc. Just Released Its Yearly Results And Analysts Are Updating Their Estimates
    Business
    Simply Wall St.

    Roku, Inc. Just Released Its Yearly Results And Analysts Are Updating Their Estimates

    The yearly results for Roku, Inc. (NASDAQ:ROKU) were released last week, making it a good time to revisit its performance. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Following the latest results, Roku's 15 analysts are now forecasting revenues of US$1.61b in 2020.

  • Netflix Stock Is Nearing A Key Buy Point
    News
    Investor's Business Daily Video

    Netflix Stock Is Nearing A Key Buy Point

    The IBD Live Team discusses Netflix stock on Tuesday as it nears a key cup-based buy point.

  • Michael Burry's Scion Asset Management Buys 5 Stocks in the 4th Quarter
    Business
    GuruFocus.com

    Michael Burry's Scion Asset Management Buys 5 Stocks in the 4th Quarter

    GuruFocus has detected 5 Warning Signs with BBBY. Click here to check it out. BBBY 30-Year Financial Data The intrinsic value of BBBY Peter Lynch Chart of BBBY As of quarter-end, Scion's $82 million equity portfolio contains nine stocks, with turnover of 48%.

  • Here’s the reason Americans are saving so much of their income
    Business
    MarketWatch

    Here’s the reason Americans are saving so much of their income

    U.S. household wealth compared to income is near a record high. In the fourth quarter, savings as a percent of disposable income was 7.7%, more or less the post-crisis average. Some of the explanation can be boiled down to: Goldman's clients.

  • What ‘Rothifying’ 401(k)s Would Mean for Retirees
    Business
    The Wall Street Journal

    What ‘Rothifying’ 401(k)s Would Mean for Retirees

    Research shows that switching 401(k)s to after-tax contributions would boost tax returns in the short term, but leave retirees worse off.

  • David Rolfe Adds 4 Stocks to Portfolio in 4th Quarter
    Business
    GuruFocus.com

    David Rolfe Adds 4 Stocks to Portfolio in 4th Quarter

    The stock traded for an average price of $57.47 per share during the quarter. The New York-based pharmaceutical company, which focuses on drugs to treat cardiovascular, oncology and immune disorders, has a $155.61 billion market cap; its shares were trading around $66.38 on Tuesday with a price-earnings ratio of 30.25, a price-book ratio of 6.11 and a price-sales ratio of 4.48. The Peter Lynch chart shows the stock is trading above its fair value, suggesting it is overpriced.

  • Business
    Barrons.com

    Tesla Stock Is Still Skyrocketing. Critics Are Giving Up.

    Investors who thought (TSLA) stock's volatility would calm down after its epic stock price rise are, apparently, wrong. Tesla (ticker: TSLA) stock was up more than 7% in trading on Tuesday, to about $858.40 a share at the close, after three bearish Wall Street analysts increased their price targets. None, however, upgraded the stock.

  • Twitter Buys Chroma Labs, Startup Founded by Facebook Veterans
    Business
    Bloomberg

    Twitter Buys Chroma Labs, Startup Founded by Facebook Veterans

    Chroma Labs was launched last fall with an app that lets people edit photos and videos before sharing them on the Stories features inside other apps, like Instagram or Snap Inc.'s Snapchat. The company is joining Twitter to “give people more creative ways to express themselves in conversations,” said Twitter's head of product, Kayvon Beykpour, in a tweet.

  • Booming market for influencers to hit $15 billion: analyst
    Business
    Yahoo Finance

    Booming market for influencers to hit $15 billion: analyst

    Social media influencers are everywhere, and they aren't likely to go away anytime soon, said Sylvia Jablonski, managing director of capital markets at Direxion. Influencers haven't just changed how people shop — they've completely transformed the advertising industry landscape. "I think influencers are staked to become very, very rich," she said, noting that the spend on influencers is going to go from about $8 billion today to about $15 billion in the next couple of years.

  • If you could buy only one stock for 5G and artificial intelligence exposure, this would be it
    Business
    MarketWatch

    If you could buy only one stock for 5G and artificial intelligence exposure, this would be it

    During the California gold rush, many miners went bankrupt. Most investors recognize that the gold rush is on in 5G and artificial intelligence. The picks and shovels for the present-day gold rushes are semiconductors.

  • Dow Jones Futures: AMD Ignores Apple-Led Retreat; Enphase, SolarEdge, Amedisys, 10X Genomics, Palomar Are Key Movers Late
    Business
    Investor's Business Daily

    Dow Jones Futures: AMD Ignores Apple-Led Retreat; Enphase, SolarEdge, Amedisys, 10X Genomics, Palomar Are Key Movers Late

    Dow Jones futures rose modestly Tuesday, along with S&P 500 futures and Nasdaq futures. The stock market rally held up well Tuesday despite an Apple revenue warning on the coronavirus. Enphase Energy, Amedisys and 2019 IPO stocks 10X Genomics and Palomar Holdings reported earnings.

  • Why Agnico Eagle Mines Is a Buy
    Business
    GuruFocus.com

    Why Agnico Eagle Mines Is a Buy

    Gold price outlook On Monday, Feb. 17, gold closed at $1,580.80 per troy ounce on the London bullion market and at $1,587.05 per troy ounce on the Comex gold futures market, gaining on average about 19% from the same period a year ago. But the rally in the gold price is not over. Economic weakness will likely spread due to factors such as trade tensions and the new coronavirus outbreak in China, which might even spread globally.

  • 3 “Strong Buy” Stocks Top Investors Are Snapping Up Right Now
    Business
    TipRanks

    3 “Strong Buy” Stocks Top Investors Are Snapping Up Right Now

    See Centene stock analysis on TipRanks) Applied Materials (AMAT) Next up is a fellow large cap, though from an entirely different sector. Semi-conductor company Applied Materials makes integrated circuit chips for a wide range of electronics, including TVs, smartphones and flat panel display screens. The $61 billion heavyweight's robust start to 2020 is a direct continuation of 2019's stellar performance; last year's gains of 90% have been boosted by a further 9% year-to-date.