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What's in Store for Netgear (NTGR) this Earnings Season?

Netgear Inc. NTGR is set to report first-quarter 2016 results on Apr 27. Last quarter, the company posted a positive earnings surprise of 33.93%. The company has posted an average positive earnings surprise of 11.00% over the past four quarters.

Let’s see how things are shaping up for this announcement.

Factors to Consider

Netgear is a global networking company that delivers products to consumers, businesses, and service providers.

We believe that Netgear’s strength in its retail business will primarily drive results. Additionally, a strong product portfolio, comprising offerings like Arlo smart home securitycameras and Nighthawk routers and gateways, is expected to boost the top line going forward. However, the service provider business continues to pose challenges.

For the first quarter, the company expects revenues in the range of $290 million to $305 million. Non-GAAP operating margin is expected in a range of 9.5% to 10.5%

Earnings Whispers

Our proven model does not conclusively show that Netgear is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.

Zacks ESP: Netgear currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 52 cents per share.

Zacks Rank: Netgear has a Zacks Rank #3, which when combined with a 0.00% ESP, makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks to Consider

Here are some stocks worth considering that, as per our model, have the right combination of elements to post an earnings beat this quarter:

Silicon Motion Technology Corp. SIMO with an Earnings ESP of +7.27% and a Zacks Rank #1

Verisk Analytics, Inc. VRSK with an Earnings ESP of +1.30% and a Zacks Rank #1.

GoDaddy Inc. GDDY with Earnings ESP of +33.33% and a Zacks Rank #2

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
NETGEAR INC (NTGR): Free Stock Analysis Report
 
VERISK ANALYTIC (VRSK): Free Stock Analysis Report
 
SILICON MOTION (SIMO): Free Stock Analysis Report
 
GODADDY INC-A (GDDY): Free Stock Analysis Report
 
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