That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Over the last four quarters, the company has beaten consensus EPS estimates four times.Īn earnings beat or miss may not be the sole basis for a stock moving higher or lower. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.įor the last reported quarter, it was expected that Splunk would post a loss of $0.37 per share when it actually produced earnings of $0.09, delivering a surprise of +124.32%. 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, this combination indicates that Splunk will most likely beat the consensus EPS estimate.ĭoes Earnings Surprise History Hold Any Clue?
On the other hand, the stock currently carries a Zacks Rank of #3. This has resulted in an Earnings ESP of +9.43%. How Have the Numbers Shaped Up for Splunk?įor Splunk, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. 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). Please note that a negative Earnings ESP reading is not indicative of an earnings miss. 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. However, the model's predictive power is significant for positive ESP readings only.Ī 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). Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus 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. 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. This insight is at the core of our proprietary surprise prediction model - the Zacks Earnings ESP (Expected Surprise Prediction).
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.Įstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Revenues are expected to be $845.93 million, up 27.3% from the year-ago quarter.
#Splunk earnings software#
This maker of software that helps companies collect and analyze internal data is expected to post quarterly earnings of $0.23 per share in its upcoming report, which represents a year-over-year change of +162.2%. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. On the other hand, if they miss, the stock may move lower. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on November 30. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The market expects Splunk (SPLK) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended October 2022.
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