Resources Connection, Inc. RECN is slated to release third-quarter fiscal 2019 results on Apr 3, after the bell.
The company has an impressive earnings surprise history. Its earnings beat estimates in three of the trailing four quarter, with an average positive surprise of 35.4%. The stock has gained 16.7% year to date.
Let’s see how things are shaping up for the announcement.
Revenues to Grow Y/Y
The Zacks Consensus estimate for revenues in the to-be-reported quarter is pegged at $184 million, reflecting year-over-year increase of 7%. The upside is likely to be driven by the company’s go-to-market initiatives.
The initiatives include increasing engagement of client service and technical sales teams with clients, aligning incentive compensation programs to sales growth and margin improvement and using an energized business development team and sales practices to accelerate new client acquisition and large client penetration.
A strong revenue performance is expected from North America in the to-be-reported quarter with a stable trend in Europe and Asia Pacific. The taskforce and Accretive Solutions acquisitions are expected to contribute significantly to the top line.
Resources Connection, Inc. Revenue (TTM)
Resources Connection, Inc. Revenue (TTM) | Resources Connection, Inc. Quote
Earnings to Be in Good Shape
The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at $184 million, reflecting year-over-year rally of 22.2%. The expected increase is likely to be driven by internal pricing improvement initiatives as well as lower medical costs.
What Our Model Says?
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP.
Resources Connection has an Earnings ESP of 0.00% and a Zacks Rank #3, a combination that makes surprise prediction difficult.
Stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are other stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these have the right combination of elements to beat estimates.
Mastercard MA has an Earnings ESP of +0.02% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Avis Budget CAR has an Earnings ESP of +19.61% and a Zacks Rank #3.
DocuSign, Inc. DOCU has an Earnings ESP of +3.87% and a Zacks Rank #3.
Zacks' Top 10 Stocks for 2019
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