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What's in Store for Smith Micro Software (SMSI) Q1 Earnings?

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·3 min read
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Smith Micro Software, Inc. SMSI is set to report first-quarter 2020 results on May 6.

The Zacks Consensus Estimate for revenues is pegged at $12.4 million, which indicates growth of 47.5% from the year-ago quarter’s reported figure.

The consensus mark for first-quarter earnings has been steady at 8 cents per share over the past 30 days, which indicates year-over-year surge of 300%.

The company has a trailing four-quarter positive earnings surprise of 70.2%, on average.

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

Smith Micro Software, Inc. Price and EPS Surprise

 

Smith Micro Software, Inc. Price and EPS Surprise
Smith Micro Software, Inc. Price and EPS Surprise

Smith Micro Software, Inc. price-eps-surprise | Smith Micro Software, Inc. Quote

 

Factors at Play

Smith Micro Software’s first-quarter performance is expected to have gained from growing clout of SafePath, the company’s family digital lifestyle and safety platform. Notably, stay-at-home trend stemming from the COVID-19 outbreak is likely to have driven adoption of the platform.

The company also expects synergies from its acquisition of Circle Media Labs’ Operator business to have contributed to first-quarter revenues.

Moreover, the company’s investments in integrating additional capabilities like dynamic pricing to its ViewSpot retail display management (RDM) platform is likely to have boosted its adoption among cable and mobile operators. Notably, AT&T Mexico adopted the platform in the first quarter.

Increasing popularity of the company's products instill confidence in the stock. Notably, shares of Smith Micro Software have returned 15.3% in the year-to-date period outperforming the industry’s rise of 4.1%.

One of Smith Micro Software’s CommSuite customers — Sprint — completed the merger with major telecom company T-Mobile. This is anticipated to have driven Smith Micro Software’s performance in the first quarter as the company gained access to the newly formed entity’s combined installed base.

However, increased expenditures on hiring efforts and expenses pertaining to the acquisition of Circle Media Labs’ Operator business amid stiff completion from Broadvoice and FracTel is likely to have put pressure on margins in the to-be-reported quarter.

What Our Model Says

According to 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. But that’s not the case here.

Smith Micro Software has an Earnings ESP of -6.67% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks you may consider as our proven model shows that these have the right mix of elements to beat estimates this time around.

Wayfair W has an Earnings ESP of +1.69% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shopify SHOP has an Earnings ESP of +23.41% and is #2 Ranked.

Etsy ETSY has an Earnings ESP of +18.31% and a Zacks Rank #2.

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Smith Micro Software, Inc. (SMSI) : Free Stock Analysis Report
 
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