SAIC (SAIC), delivered unexpected earnings and revenue surprises at 34.01%, and 2.76% respectively for the quarter ending July 2021. Are the numbers telling us something?
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This story originally appeared on Zacks
SAIC (SAIC), which reported quarterly earnings of $1.97 per stock beat the Zacks Consensus Estimate at $1.47/share. This is compared to the earnings of $1.63 a year earlier. These numbers are adjusted to account for non-recurring expenses.
The earnings surprise for this quarter is 34.01%. It was predicted that the information technology company would report earnings of $1.49 per shares quarter back, but it produced earnings $1.94 per share, which is a surprising 30.20%.
The company’s consensus EPS estimates have been exceeded four times in the past four quarters.
SAIC, which is part of the Zacks Computers-IT Services industry, reported revenues in the quarter ending July 2021 at $1.84 Billion. This was more than the Zacks Consensus Estimate (2.76%). This is compared to the $1.76 billion in revenues a year ago. Over the past four quarters, consensus revenue estimates have been exceeded twice by the company.
Based on recently released numbers, the sustainability of the stock’s price movement and future earnings outlook will largely depend on management’s comments on the earnings conference.
SAIC shares lost 11.1% in the first year, compared to the 20.5% gain by the S&P 500.
Next Steps for SAIC
Although SAIC’s performance has been below the market’s so far this year the main question for investors is what the future holds.
Although there aren’t easy answers, investors can use the earnings outlook to help them make informed decisions. This includes current expectations of earnings for the next quarter, as well as how they have changed in recent months.
Research shows that there is a strong relationship between stock movement and earnings revision trends. These revisions can be tracked by investors or they can rely on a proven rating tool such as the Zacks Rank. This has a strong track record in harnessing earnings estimate revisions’ power.
The trend in estimate revisions for SAIC prior to this earnings report was positive. Although the direction and magnitude of the estimate revisions may change after the release of the earnings report by the company, the stock currently has a Zacks rank #2 (Buy). The shares will outperform in the coming months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We will see how the estimates for the next quarters and the current fiscal year evolve in the days to come. Current consensus EPS estimates are $1.56 for $1.88 Billion in revenue for the next quarter, and $6.43 for $7.31Billion in current fiscal year revenues.
The outlook for an industry’s performance can also have a significant impact on stock price. Investors need to be aware of this fact. Computers – IT Services currently ranks in the 32% lowest Zacks industry rank. Research shows that the top 50 percent of Zacks-ranked businesses outperforms the bottom half by more than two to one.
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Publited Fri, 3 Sep 2021 at 01:14.53 +0000