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Software Stocks' Earnings Preview: CMCM, CRM, SNPS, TNGO

The Q1 earnings season is nearing an end with quite a few beats and some misses on board. As per our Earnings Trend report, 459 S&P 500 members have reported their quarterly numbers, with 71% beating on earnings and 55.3% surpassing revenue estimates, resulting in a blended beat of 71%.

On a consolidated basis, earnings from tech companies have declined 5.6% year over year although revenues grew 1% in the quarter. The performance of the sector was marred by soft quarterly results from big players like Apple AAPL. Excluding Apple, tech sector earnings would be marginally up (0.7%) over the prior-year quarter.

But notably, within the tech space, software stocks have been relatively stable because of consistently growing demand. In fact, in the last two quarters, software earnings registered growth of 9.7% and 7.6%.

Among the software stocks slated to report on May 18 and May 19, let’s see what’s ahead for these four software stocks, namely Cheetah Mobile Inc. CMCM, salesforce.com, Inc. CRM, Synopsys Inc. SNPS and Tangoe, Inc. TNGO.

Cheetah Mobile, which is slated to report first-quarter earnings on May 19, develops internet security software. The company offers applications for its users and global content distribution channels. It has an Earnings ESP of 0.00% as the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at 3 cents.

The stock carries a Zacks Rank #3 (Hold). Cheetah was profitable last year, with earnings growth of 137.5% and net margin growth of 4.81%.

salesforce.com, which is about to report first-quarter fiscal 2017 earnings on May 18, has an Earnings ESP of 0.00% as the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at 8 cents. The stock carries a Zacks Rank #3, which increases the predictive power of ESP. But a 0.00% ESP makes surprise prediction difficult.

We should note that salesforce.com has beaten the Zacks Consensus Estimate in just one of the trailing four quarters, delivering an average negative surprise of 18.75%. (Read more: Salesforce Q1 Earnings: Stock to Pull a Surprise?)

Synopsys is a vendor of electronic design automation software to the semiconductor and electronics industries. The company, which is scheduled to report second-quarter fiscal 2016 after the bell on May 18, has an Earnings ESP of 0.00% as the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at 47 cents. The stock holds a Zacks Rank #2 (Buy), which increases the predictive power of ESP. But a 0.00% ESP makes surprise prediction difficult.

We should note that Synopsys has beaten the Zacks Consensus Estimate in three of the trailing four quarters, with an average negative surprise of 11.81%.

Tangoe, which is scheduled to report first-quarter on May 19, has an Earnings ESP of 0.00% as the Most Accurate Estimate and the Zacks Consensus Estimate are both at a loss of 6 cents. The stock carries a Zacks Rank #3, which increases the predictive power of ESP but a 0.00% ESP makes surprise prediction difficult.

Stay tuned! Check back later for our earnings coverage of these stocks.

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APPLE INC (AAPL): Free Stock Analysis Report
 
SALESFORCE.COM (CRM): Free Stock Analysis Report
 
SYNOPSYS INC (SNPS): Free Stock Analysis Report
 
TANGOE INC (TNGO): Free Stock Analysis Report
 
CHEETAH MBL-ADR (CMCM): Free Stock Analysis Report
 
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