What's in Store for Arlo Technologies' (ARLO) Q1 Earnings?
Arlo Technologies ARLO is slated to report first-quarter 2022 results on May 10.
The company expects first-quarter 2022 revenues between $110 and $120 million. Adjusted loss per share is expected to be below 6 cents.
For the first quarter, the Zacks Consensus Estimate for revenues currently stands at $114.85 million, suggesting growth of 39.11% from the year-ago quarter.
The consensus mark for first-quarter loss remained unchanged at 3 cents per share over the past 30 days, flat with the year-ago quarter.
The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 108.81%.
Arlo Technologies, Inc. Price and EPS Surprise
Arlo Technologies, Inc. price-eps-surprise | Arlo Technologies, Inc. Quote
Factors to Note
Arlo’s first-quarter performance is likely to have benefited from its new business model to focus on a services-focused strategy. The new business model may have attracted a new subscriber base leading to an increase in paid accounts, which is likely to have impacted ARR growth positively. In the first quarter, Arlo is expected to reach $100 million in ARR.
The company’s expanding portfolio of products and services has been acting as key catalysts. In the first quarter, the company is expected to have gained from a plethora of new services introduced in Arlo Secure Services plans, including object detection, AI-based audio detection, and interactive notifications that allow requesting fire, medical or police support.
Arlo’s expanding partner base has been acting as a tailwind. In the to-be-reported quarter, Arlo may have benefited from the strategic partnership with Amazon AMZN and Alphabet GOOGL.
Integration with Amazon Alexa’s smart home ecosystem allows Arlo to provide a smart home security system, which is expected to attract new customers. Customers can use Arlo’s new range of services, like virtual security assistance voice recognition and receive notifications, with the help of Alexa.
Arlo’s partnership with Google assistant will enable customers to enjoy a cross-ecosystem, which will provide customers with a complete smart home experience, and they would not have to choose one ecosystem over another. Google’s reach across the country and globally is likely to have helped Arlo tap into new customer bases.
The ongoing supply chain constraints may have impacted Arlo’s production capabilities negatively. The company is heavily dependent on limited third-party sources for several key components. Failure to meet supply requirements by these sources is expected to have impacted Arlo’s sales negatively, and increased component costs further.
What Our Model Unveils
Our proven model predicts an earnings beat for Arlo this time around. Per the Zacks model, 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.
ARLO has a Zacks Rank #3 and an Earnings ESP of +33.33%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Another Stock to Consider
Here is another other company worth considering, as our model shows that it too has the right combination of elements to beat on earnings in their upcoming releases:
BWX Technologies BWXT has an Earnings ESP of +2.29% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
BWX’s shares have returned 9.2% in the year-to-date period against the Zacks Computer and Technologysector’s decline of 23.2%.
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