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What's in Store for SecureWorks (SCWX) This Earnings Season?

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·3 min read
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SecureWorks Corporation SCWX is slated to release first-quarter fiscal 2021 results on Jun 2.

The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $135.6 million, indicating a 2% year-over-year increase. The consensus mark for earnings is pinned at a loss of 5 cents, wider than the loss of 2 cents per share reported in the year-ago quarter.

In the last reported quarter, the company reported non-GAAP earnings per share of 2 cents, flat year over year. Further, revenues climbed 8.6% year on year to $142 million.

SecureWorks Corp. Price and Consensus

SecureWorks Corp. Price and Consensus
SecureWorks Corp. Price and Consensus

SecureWorks Corp. price-consensus-chart | SecureWorks Corp. Quote

Let’s see how things have shaped up for this announcement.

Factors at Play

SecureWorks’ quarterly results are expected to reflect benefits from the continued solid demand for its products, given the healthy environment of the global security market.

Also, a huge global workforce is working remotely, in an effort to contain the spread of coronavirus. However, an increasing number of people logging into employers' networks has been triggering a greater need for security. This might have had spurred demand for SecureWorks’ products in the fiscal first quarter.

Nonetheless, the company’s bottom line is expected to have been adversely impacted by the revenue shift to VMware Carbon Black portfolio mix from Dell SafeGuard. Notably, in the fourth quarter of fiscal 2020, SecureWorks had announced that the revenue shift clipped its gross margin by 160 basis points.

What Our Model Says

Our proven model does not predict an earnings beat for SecureWorks this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances 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.

SecureWorks currently carries a Zacks Rank of 2 and has an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

The J. M. Smucker Company SJM has an Earnings ESP of +4.33% and carries a Zacks Rank 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Campbell Soup Company CPB has an Earnings ESP of +1.23% and currently carries a Zacks Rank of 1.

Accenture ACN has an Earnings ESP of +0.65% and holds a Zacks Rank of 3 currently.

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This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.

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