ZoomInfo (ZI) Q3 Earnings and Revenues Top Estimates

If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider Hewlett Packard Enterprise (HPE). This company, which is in the Zacks Computer - Integrated Systems industry, shows potential for another earnings beat.

This information technology products and services provider has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 9.61%.

For the last reported quarter, Hewlett Packard Enterprise came out with earnings of $0.50 per share versus the Zacks Consensus Estimate of $0.46 per share, representing a surprise of 8.70%. For the previous quarter, the company was expected to post earnings of $0.38 per share and it actually produced earnings of $0.42 per share, delivering a surprise of 10.53%.

Thanks in part to this history, there has been a favorable change in earnings estimates for Hewlett Packard Enterprise lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Hewlett Packard Enterprise has an Earnings ESP of +3.01% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #3 (Hold), it shows that another beat is possibly around the corner.

When the Earnings ESP comes up negative, investors should note that this will reduce the predictive power of the metric. But, a negative value is not indicative of a stock's earnings miss.

Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate.

Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

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Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.

We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.

Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.

The Zacks Earnings ESP, Explained

The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.

Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.

In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.

Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.

Should You Consider Hewlett Packard Enterprise?

Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Hewlett Packard Enterprise (HPE) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.57 a share, just 14 days from its upcoming earnings release on November 26, 2024.

HPE has an Earnings ESP figure of +3.01%, which, as explained above, is calculated by taking the percentage difference between the $0.57 Most Accurate Estimate and the Zacks Consensus Estimate of $0.55. Hewlett Packard Enterprise is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

HPE is just one of a large group of Computer and Technology stocks with a positive ESP figure. Alphabet (GOOGL) is another qualifying stock you may want to consider.

Slated to report earnings on February 4, 2025, Alphabet holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $2.13 a share 84 days from its next quarterly update.

Alphabet's Earnings ESP figure currently stands at +0.44% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.12.

HPE and GOOGL's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

Find Stocks to Buy or Sell Before They're Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

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Qualcomm Incorporated QCOM recorded solid fourth-quarter fiscal 2024 results, with adjusted earnings and revenues beating the Zacks Consensus Estimate, driven by healthy demand trends in Android handsets and automotive businesses. Both metrics improved year over year, led by the strength of the business model, revenue diversification and the ability to respond proactively to the evolving market scenario.

QCOM Rides on Snapdragon Mobile Platform

Qualcomm envisions solid growth opportunities within the mobile space, driven by the strength of its Snapdragon portfolio. With the accelerated rollout of 5G technology, the chip manufacturer is benefiting from investments toward building a licensing program in mobile. The company is well-positioned to meet its long-term revenue targets driven by solid 5G traction, greater visibility and a diversified revenue stream.

Leveraging processors with multi-core CPUs with cutting-edge features, amazing graphics and worldwide network connectivity, Qualcomm Snapdragon mobile platforms are fast with superb power efficiency. Smartphones and mobile devices built with Snapdragon mobile platforms enable immersive augmented reality and virtual reality experiences, brilliant camera capabilities, superior 4G LTE and 5G connectivity with state-of-the-art security solutions.

Automotive, IoT Businesses Buoy QCOM

The company intends to harness artificial intelligence to meet increased demands for essential products and services that are the building blocks of digital transformation in a cloud economy. Qualcomm continues to focus on the seamless transition from a wireless communications firm for the mobile industry to a connected processor company for the intelligent edge. It is witnessing healthy traction in EDGE networking that helps to transform connectivity in cars, business enterprises, homes, smart factories, next-generation PCs, wearables and tablets. IoT revenues soared 22% in the fiscal fourth quarter to $1.68 billion on new product launches and channel inventory normalization.

The buyout of Veoneer, Inc. has offered Qualcomm a firmer footing in the emerging market of driver-assistance technology as it aims to extend the Snapdragon Ride Advanced Driver Assistance Systems (ADAS) portfolio. The Arriver business of Veoneer operates the dedicated software unit focused on sensor perception and drive policy, including a full stack of features and functions. With the acquisition, Qualcomm has incorporated Arriver's Computer Vision, Drive Policy and Driver Assistance assets into its ADAS portfolio to deliver an open and competitive platform for automakers to better compete with rivals within the self-driving vehicle market.

Automotive telematics and connectivity platforms, digital cockpit and C-V2X solutions are fueling emerging automotive industry trends such as the growth of connected vehicles, the transformation of the in-car experience and vehicle electrification. Automotive revenues surged 68% to a record high of $899 million, driven by increased content in new vehicle launches with its Snapdragon Digital Chassis platform. This was the 16th consecutive quarter in which Qualcomm recorded double-digit growth in automotive revenues.

Price Performance

Over the past year, Qualcomm has gained 38% compared with the industry’s growth of 51.7%, outperforming peers like Hewlett Packard Enterprise Company HPE but lagging Broadcom Inc. AVGO.

One-Year Price Performance

Estimate Revision Trend

Despite solid quarterly results, earnings estimates for Qualcomm for 2024 have moved down 15 cents to $10.83 over the past seven days, while the same for 2025 has declined 18 cents to $11.99. This indicates a bearish sentiment due to a placid long-term business outlook of the company.

Margin Pressure Dents QCOM Prospects

Over the years, Qualcomm's margins have declined due to high operating expenses and R&D (research & development) costs. Although the margins improved in the fiscal fourth quarter, the company expects softness in the handset market and a weaker overall mix of devices in the future. Shift in the share among original equipment manufacturers at the premium tier has reduced Qualcomm's near-term opportunity to sell integrated chipsets from the Snapdragon platform. Aggressive competition from low-cost chip manufacturers and established players in the mobile phone chipset market is also likely to hurt Qualcomm's profits. Although the global smartphone market is expected to maintain its momentum over the next three to four years, a major portion of this growth is expected to come from the low-cost emerging markets, which are likely to weigh on Qualcomm's margins.

End Note

With solid quarterly results and healthy revenue-generating potential driven by robust demand trends, Qualcomm appears to be a solid investment proposition. A strong emphasis on quality, diligent execution of operational plans and continuous portfolio enhancements are driving more value for customers.

However, stiff competition and softness in key end markets are likely to put pressure on the bottom-line growth. High R&D costs eroded its profitability to a large extent. With declining earnings estimates, the stock is witnessing a negative investor perception. Qualcomm is reportedly undertaking job cuts and retrenchments to sustain its business in China, raising questions about its long-term viability plans in the communist country. With a Zacks Rank #3 (Hold), Qualcomm appears to be treading in the middle of the road, and investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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