Will LendingClub beat Estimates in its Next Earnings Report?
You’ve been looking for stocks that could be well-positioned to continue its earnings-beat streak in the upcoming report. LendingClub, which is part of the Zacks Financial – Miscellaneous Service industry, is worth looking at.
The company connects borrowers with lenders online and has had a good streak of exceeding earnings estimates, especially when compared to the two previous reports. For the past two quarters, the average surprise was 6.31%.
LendingClub reported earnings of $0.36 per stock in the most recent quarter, compared to the Zacks Consensus Estimate $0.35 per share. This is a surprise by 2.86%. In the last quarter, earnings were expected to be $0.41 per share. However, earnings actually came in at $0.45 per shared, which is a surprise by 9.76%.
Surprise Price and EPS
LendingClub’s earnings surprise history has led to estimates trending higher. It’s easy to see why the stock’s positive Zacks EARNINGS ESP (Expected Surprising Prediction) is such a good indicator of future earnings beats when combined with its solid Zacks Ranking.
Our research has shown that stocks with a positive Earnings ESP combined with a Zacks Rank 3 (Hold) or higher produce a positive surprise almost 70% of the times. This means that if 10 stocks have this combination, there could be seven stocks that surpass the consensus estimate.
The Zacks Earnings ESP compared the Most Accurate Estimate and the Zacks Consensus Estimate of the quarter. The Most Accurate Estimate, which is a version Zacks Consensus whose definition includes change, is the Zacks Consensus’ most accurate estimate. This is because analysts who revise their estimates before earnings releases have the most current information. It could be that this information will prove to be more accurate than what others contributed to the consensus.
LendingClub currently boasts an EarningsESP of +34.49%. This suggests that analysts are now bullish about the company’s prospects. When combined with the stock’s Zacks Rank 3 (Hold), this positive Earnings ESP suggests that another beat could be around the corner.
It’s important to remember that a negative Earnings ESP value decreases its predictive power. However, a negative Earnings ESP doesn’t necessarily indicate earnings miss.
Although many companies surpass the consensus EPS estimate and their stocks move higher, it may not be the only reason. However, stocks can hold their ground even when they fall short of the consensus estimate.
It is important to verify a company’s Earnings ESP prior to its quarterly release. This will increase the chances of success. Our Earnings ESP Filter will help you find the best stocks to purchase or sell before they report.
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LendingClub Corporation (LC) : Free Stock Analysis Report