Can Alarm.Com (ALRM) Spring A Surprise In Q3 Earnings?
Zacks Investment Research | Nov 10, 2016 08:53PM ET
Alarm.Com Holdings, Inc. (NASDAQ:ALRM) is expected to report third-quarter 2016 results on Nov 14. Last quarter, the company posted a massive positive earnings surprise of 30.0%.
Let's see how things are shaping up for this announcement.
Factors to Consider
Alarm.Com offers cloud-based security and home automation products. By relying on cloud technology, the company significantly reduces operating costs and allows users to manage their home from anywhere. For example, users can remotely control almost anything in their home, including security systems, thermostats, light switches and even garage doors through a mobile application. The company also offers wellness and activity tracking software.
The company’s second-quarter earnings beat the Zacks Consensus Estimate by 3 cents. Also, revenues of $64.4 million were up 24% year over year. Moreover, SaaS and license revenues rose 23% year over year to $42.0 million.
The company has a differentiated product portfolio and broad dealer network. It is working toward building new service provider relationships, breaking new grounds in product innovation and achieving international reach. In sum, this will help the company to penetrate the home automation and security market, and gain share. This will also help in expanding its customer base, thereby driving results.
Alarm.Com is already poised to a vantage player in the expanding home automation industry. For the third quarter, the company expects SaaS and license revenues in the range of $43.8–$44.0 million.
However, intensifying competition and an uncertain macro environment could impact results in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Alarm.Com will beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP Filter .
Zacks Rank: Alarm.Com’s Zacks Rank #3 increases the predictive power of ESP. But a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or #5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
ALARM.COM HLDGS Price and EPS Surprise
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