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Will Voxeljet (VJET) Beat Estimates This Earnings Season?

Voxeljet AG VJET is slated to report first-quarter 2016 results on May 12, 2016, after the closing bell.

In the preceding quarter, the company disappointed investors by posting a negative earnings surprise of around 75.0%, marking its second consecutive negative surprise. The company has a dismal surprise history, missing estimates in three out of the trailing four quarters, missing by an average of 22.33% per quarter.

Despite its unimpressive track record, we believe Voxeljet is poised to beat estimates this time around by narrowing down on losses.

Why a Likely Positive Surprise?

Our proven model shows that Voxeljet is likely to beat earnings because it has the right combination of two key ingredients.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +18.2%. This is a meaningful and leading indicator of a likely positive surprise.

Zacks Rank: Voxeljet carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 have a significantly higher chance of beating earnings estimates. Meanwhile, Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

The combination of Voxeljet’s Zacks Rank #3 and ESP of +18.2% makes us confident of a beat in the upcoming report.

Factors Influencing Growth

Voxeljet’s first-quarter financial performance is expected to benefit from rising Services revenues at its German facility and stellar performance of subsidiaries in the U.S. and the U.K. Continuous capacity expansion at the German subsidiary has significantly benefited both volume and the number of shipped parts, thereby driving growth over the past couple of quarters. The company believes strategic repositioning of Voxeljet UK subsidiary and scaling up of operations at Voxeljet America subsidiary will result in stronger performance.

Moreover, notable customer demand and positive “quoting activity” across the globe are expected to act as fundamental growth drivers for the to-be-reported quarter. Also, the company’s Systems business is expected to aid quarterly top-line growth as it brings in recurring revenues through the sale of consumables, spare parts and maintenance. Apart from external growth drivers, Voxeljet’s internal restructuring actions, which the company has been diligently pursuing since the fourth-quarter of 2015, are also expected to aid growth.

The implementation of a new ERP system to improve core operations and the introduction of “Matrix organization” to smoothen flow of information are designed to remove the existing deficiencies hindering organizational performance. Additionally, the company’s restructuring initiatives implemented in Dec 2015 in its U.K. market, catering to the film entertainment and merchandising industry, are likely to be conducive to top-line growth in the first quarter.

In addition, the company’s recently undertaken strategic expansionary drive in the Asian markets is expected to act as a tailwind for first-quarter 2016 performance. The previously announced joint venture partnership with Meimai in China in the fourth quarter of 2015 has helped Voxeljet to set up a direct operating presence in the foundry market of the country.

Other Stocks to Consider

Here are some other companies that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Synopsys Inc. SNPS, with an earnings ESP of +6.38% and Zacks Rank #2. The company is slated to report fiscal second-quarter 2016 results on May 18, after the closing bell.

Agilent Technologies, Inc. A with an earnings ESP of +2.56% and a Zacks Rank #2. The company is slated to report fiscal second-quarter 2016 results on May 16, after the closing bell.

Asure Software, Inc. ASUR with an earnings ESP of +200.00% and a Zacks Rank #3. The company is slated to report first-quarter 2016 results on May 12, before the market opens.

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ASURE SOFTWARE (ASUR): Free Stock Analysis Report
 
SYNOPSYS INC (SNPS): Free Stock Analysis Report
 
AGILENT TECH (A): Free Stock Analysis Report
 
VOXELJET AG-ADR (VJET): Free Stock Analysis Report
 
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