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Slack (WORK) to Post Q1 Earnings: What's in the Offing?

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Slack Technologies, Inc. WORK will report first-quarter fiscal 2021 results on Jun 4, after the bell.

Shares of the company have gained a massive 44.7% year to date, significantly outperforming the 1.4% decline of the industry it belongs to.

Q1 Expectations

The Zacks Consensus Estimate for quarterly revenues is pegged at $186.5 million, indicating sequential growth of 2.5%. Expansion of existing paid customers and addition of new paid customers are expected to have driven the top line. The Atlassian acquisition is likely to have significantly benefited paid customer growth. In the fourth quarter of fiscal 2020, the company’s revenues of $181.9 million increased 7.8% sequentially.

The consensus mark for the bottom line is pegged at a loss of 7 cents, suggesting a wider loss than the prior quarter’s loss of 4 cents. The sequential widening of the loss might have resulted from elevated operating expenses.  Notably, in the fourth quarter of fiscal 2020, non-GAAP loss flared up 100% sequentially.

What Our Model Says

Our proven Zacks model does not conclusively predict an earnings beat for Slack this season. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Slack has an Earnings ESP of 0.00% and currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Performance of Some Other Business Services Companies

S&P Global Inc.’s SPGI first-quarter 2020 adjusted earnings per share of $2.73 beat the consensus mark by 15.7% and improved 29.4% year over year on revenue growth, benefits of productivity initiatives and reduced business travel. The stock currently carries a Zacks Rank #3.

IQVIA Holdings Inc.’s IQV adjusted earnings per share of $1.50 beat the consensus mark by 1.4% but decreased 1.9% on a year-over-year basis in the January-March period. The reported figure came in within the guided range of $1.46-$1.51. The stock holds a Zacks Rank #3, at present.

Insperity, Inc.’s NSP adjusted earnings of $1.70 per share beat the consensus mark by 5.6% but decreased 14.1% year over year during the March-end quarter. The reported figure matched the higher end of the guided range of $1.61-$1.70. The stock currently carries a Zacks Rank #4 (Sell).

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