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Is Vonage Holdings (VG) Poised to Surprise on Earnings?

Zacks Equity Research

Vonage Holdings Corporation ( VG) is set to release its second-quarter 2014 results before the market opens on Jul 31, 2014.


In the last quarter, the company delivered a 50.00% earnings surprise with an average beat of 41.67% in the last four quarters. Let’s see how things are shaping up for this announcement.


Factors to Considered This Quarter


Growing popularity of VoIP service in the SMB segment will continue to drive Vonage’s top line. Moreover, the acquisition of Vocalocity might further boost the company’s revenues going forward.


However, stiff competition from large carriers, sluggish international penetration along with weak subscriber growth will weigh heavily on the company’s growth prospects.


Earnings Whispers 


Our proven model does not conclusively show that Vonage is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive  Earnings ESP and a Zacks Rank #1, #2 or #3 for this to happen. Unfortunately, this is not the case here as elaborated below. Also, the Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.  


Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate are poised at 4 cents. Thus, Vonage has an Earnings ESP of 0.00%.


Zacks Rank: Vonage carries a Zacks Rank #3 (Hold) which when combined with a 0.00% ESP lowers the possibility of an earnings surprise.


Other Stocks to Consider


Here are some other companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.


TIM Participacoes S.A. ( TSU) has an Earnings ESP of +16.67% and a Zacks Rank #1 (Strong Buy).


TELUS Corp. ( TU) has an earnings ESP of +1.85% and a Zacks Rank #2 (Buy).


BCE Inc. ( BCE) has an earnings ESP of +1.28% and carries a Zacks Rank #3.

Read the Full Research Report on VG
Read the Full Research Report on TU
Read the Full Research Report on BCE
Read the Full Research Report on TSU

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