【queen of pentacles as a person】Earnings Preview: Novanta (NOVT) Q3 Earnings Expected to Decline
Novanta (NOVT) is queen of pentacles as a personexpected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended September 2020. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.
The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on November 10. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus Estimate
This photonic and motion control components maker is expected to post quarterly earnings of $0.40 per share in its upcoming report, which represents a year-over-year change of -24.5%.
Revenues are expected to be $141.95 million, down 7.9% from the year-ago quarter.
Estimate Revisions Trend
The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
Price, Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. 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.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Story continues
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Novanta?
For Novanta, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination makes it difficult to conclusively predict that Novanta will beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?
While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Novanta would post earnings of $0.24 per share when it actually produced earnings of $0.48, delivering a surprise of +100%.
Over the last four quarters, the company has beaten consensus EPS estimates four times.
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Novanta doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
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
Novanta Inc. (NOVT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
View comments
(责任编辑:Exploration)
- Insights on the Surgical Sealant/Tissue Patch Global Market to 2025 - Key Drivers and Restraints
- CaptionCall Supports “Military Makeover with Montel”
- 5 High-Yield Stocks to Defy Coronavirus-Led Crisis in April
- Bitcoin falls below 8,000 ahead of what is expected to be a rough day for U.S. stocks
- Italy opens borders ahead of neighbors, beckoning tourists
- Bellerophon Provides Clinical Program Update and Reports Third Quarter 2020 Financial Results
- Pompeo says U.S. considering welcoming Hong Kong people, entrepreneurs
- SCOR successfully sponsors a new catastrophe bond, Atlas Capital Reinsurance 2020 DAC
- UK to extend furlough scheme beyond Dec. as BOE pumps in 150bln pounds - The Sun
- Wall Street falls as coronavirus shreds U.S. payrolls
- How Does Ensign Group's (NASDAQ:ENSG) P/E Compare To Its Industry, After The Share Price Drop?
- Former California pension CIO scrutinized for China ties was highest paid state employee: watchdog
- Which Consumer Staples Stock Will Grow The Most By 2025?
-
FTC Sending More Than $470K to People Duped by My7Network, ‘Bitcoin Funding Team’ Scams
The Federal Trade Commission (FTC) said it is sending PayPal payments totaling more than $470,000 to ...[详细] -
The U.S. Dollar is trading flat early Thursday as trend traders seem poised to resume the downtrend ...[详细]
-
US colleges in the crosshairs as coronavirus fears swirl
Ascoronavirussickens people across the globe, it has had a profound effect oncollegestudents, some o ...[详细] -
Bitcoin Falls 11% In Bearish Trade
Bitcoin Falls 11% In Bearish TradeInvesting.com - Bitcoin was trading at $8,238.5 by 12:18 (16:18 GM ...[详细] -
Earnings Preview: Novanta (NOVT) Q3 Earnings Expected to Decline
Novanta (NOVT) is expected to deliver a year-over-year decline in earnings on lower revenues when it ...[详细] -
Halozyme Therapeutics, Inc. Just Recorded A 24% EPS Beat: Here's What Analysts Are Forecasting Next
As you might know,Halozyme Therapeutics, Inc.(NASDAQ:HALO) just kicked off its latest third-quarter ...[详细] -
Why Foundation Building Materials (FBM) Could Be an Impressive Growth Stock
Growth stocks can be some of the most exciting picks in the market, as these high-flyers can captiva ...[详细] -
Looking for a Growth Stock? 3 Reasons Why Lumentum (LITE) is a Solid Choice
Investors seek growth stocks to capitalize on above-average growth in financials that help these sec ...[详细] -
NEW YORK, NY / ACCESSWIRE / June 5, 2020 /Bronstein, Gewirtz & Grossman, LLC notifies investors that ...[详细]
-
Russia's Ozon wants dual listing in Moscow and U.S. -sources
MOSCOW, Nov 3 (Reuters) - Russian online retailer Ozon is considering listing its American depositar ...[详细]
Ambu A/S: Interim report for Q2 2019/20 and for the period 1 October 2019 to 31 March 2020
U.S. SEC eases crowdfunding rules for firms due to coronavirus disruption
- Skyworks Solutions (SWKS) Matches Q2 Earnings Estimates
- 240,000 U.S. Virus Deaths Don't Have to Happen
- Trump threatens to deploy U.S. military to quell riots across the country
- Analyzing Brooks Automation's Ex-Dividend Date
- Livestock Diagnostics Market Worth $1.85 billion by 2027, Growing at a CAGR of 7.8% from 2019- Exclusive Report by Meticulous Research®
- ServiceNow (NOW) Set to Acquire AI-Focused Startup Element AI
- Asian Stocks Plummet Amid Oil Price War