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What's in Store for MaxPoint (MXPT) This Earnings Season?

Internet software firm MaxPoint Interactive, Inc. MXPT is scheduled to report first-quarter 2016 results after the closing bell on May 16.

The company, which went public in early Mar 2015, recorded a healthy positive earnings surprise of 40.0% in the last reported quarter. MaxPoint has beat earnings estimates thrice in the last four quarters, bringing the average to a positive earnings surprise of 9.59%. Let’s see how things are shaping up for this announcement.

Key Factors in the First Quarter

MaxPoint’s proprietary Digital Zip technology and the MaxPoint Intelligence Platform give it a distinctive advantage in a highly competitive landscape, setting it apart from its peers. It helps to draw sales by predicting the most likely local buyers of a particular product at a specific retail location and then targeting cross-channel digital marketing programs at these buyers.

During the quarter, MaxPoint expanded its Digital Zip technology across France, Germany, Italy and Spain. The company has recorded over 30,000 new micro-neighborhoods, or Digital Zips, giving clients the ability to reach out to consumers with campaigns across Europe. This will help augment the company’s top-line growth during the quarter.

MaxPoint’s hyper-local platform along with customized store-level sales and inventory system is likely to augment digital advertising and campaign measurement capabilities. In addition, ongoing signals and alerts including store-level attributes, stock data and exception reports to the CPG companies are likely to result in actionable inputs to further improve store profitability.

Despite the growing demands for digital advertising services and cloud-based software service, MaxPoint functions in a highly competitive and fragmented industry. Thus, the company has to be on par with its competitors, which may call for higher expenses relating to research and development. In turn these expenses are expected to shrink the company’s profits.

Earnings Whispers

Our proven model does not conclusively show that MaxPoint is likely to beat earnings this quarter as it lacks the key components. 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 for MaxPoint as you will see below:

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently 0.00%.

Zacks Rank: MaxPoint’s Zacks Rank #3 increases the predictive power of the ESP. However, an earnings ESP of 0.00% makes a surprise prediction difficult.

On the other hand, the Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

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

Agilent Technologies, Inc. A, Earnings ESP of +2.56% and a Zacks Rank #2.

Itron, Inc. ITRI, Earnings ESP of +11.77% and a Zacks Rank #2.

Southern Copper Corp. SCCO, Earnings ESP of +11.11% and a Zacks Rank #3.

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SOUTHERN COPPER (SCCO): Free Stock Analysis Report
 
AGILENT TECH (A): Free Stock Analysis Report
 
ITRON INC (ITRI): Free Stock Analysis Report
 
MAXPOINT INTER (MXPT): Free Stock Analysis Report
 
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