U.S. markets open in 1 hour 42 minutes
  • S&P Futures

    4,234.25
    -2.00 (-0.05%)
     
  • Dow Futures

    33,836.00
    +1.00 (+0.00%)
     
  • Nasdaq Futures

    14,256.75
    -1.50 (-0.01%)
     
  • Russell 2000 Futures

    2,286.10
    -6.40 (-0.28%)
     
  • Crude Oil

    73.36
    +0.51 (+0.70%)
     
  • Gold

    1,783.10
    +5.70 (+0.32%)
     
  • Silver

    26.00
    +0.14 (+0.55%)
     
  • EUR/USD

    1.1953
    +0.0010 (+0.08%)
     
  • 10-Yr Bond

    1.4720
    0.0000 (0.00%)
     
  • Vix

    16.72
    -1.17 (-6.54%)
     
  • GBP/USD

    1.3970
    +0.0023 (+0.17%)
     
  • USD/JPY

    110.8080
    +0.1730 (+0.16%)
     
  • BTC-USD

    34,016.28
    +2,401.55 (+7.60%)
     
  • CMC Crypto 200

    813.96
    +19.63 (+2.47%)
     
  • FTSE 100

    7,107.12
    +17.11 (+0.24%)
     
  • Nikkei 225

    28,874.89
    -9.24 (-0.03%)
     

Why Commvault (CVLT) Could Beat Earnings Estimates Again

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Commvault Systems (CVLT), which belongs to the Zacks Computer - Software industry, could be a great candidate to consider.

This data-management software company has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 31.16%.

For the last reported quarter, Commvault came out with earnings of $0.47 per share versus the Zacks Consensus Estimate of $0.40 per share, representing a surprise of 17.50%. For the previous quarter, the company was expected to post earnings of $0.29 per share and it actually produced earnings of $0.42 per share, delivering a surprise of 44.83%.

Price and EPS Surprise

With this earnings history in mind, recent estimates have been moving higher for Commvault. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the company is positive, which is a great sign of an earnings beat, especially when you combine this metric with its nice Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Commvault currently has an Earnings ESP of +10.97%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #3 (Hold) indicates that another beat is possibly around the corner.

When the Earnings ESP comes up negative, investors should note that this will reduce the predictive power of the metric. But, a negative value is not indicative of a stock's earnings miss.

Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate.

Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
CommVault Systems, Inc. (CVLT) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research