Technology sector has displayed notable improvement in earnings performance so far in the fourth quarter as compared with the first three quarters of 2019.
Improving trend in PC shipments, strengthening data center market, increasing proliferation of IoT and growing clout of cloud-based applications are working in favor of the industry players.
Notably, for the tech companies having already reported, total earnings are up 7.2% from the same period last year on 6.7% higher revenues with 85.7% positive earnings surprises and 87.5% revenue beats.
Solid results of tech players like Apple (NASDAQ:AAPL) , Microsoft (NASDAQ:MSFT) , NVIDIA (NASDAQ:NVDA), Intel (NASDAQ:INTC), AMD and IBM (NYSE:IBM) are buoying investors’ confidence.
Per the latest Earnings Preview, Technology sector earnings are estimated to grow 5.3% year over year on revenue growth of 5.6%.
Sneak Peek Into Upcoming Earnings Releases
Given this encouraging backdrop, let’s take a look at how four tech companies — Zillow Group (NASDAQ:ZG) , Synopsys (NASDAQ:SNPS) , Five9 (NASDAQ:FIVN) and Q2 Holdings (NYSE:QTWO) — are poised ahead of their earning releases on Feb 19.
Zillow Group’s fourth-quarter 2019 results are likely to reflect solid growth in Homes segment revenues and robust demand for Zillow Offers.
Notably, per the Zacks quantitative model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
This Zacks Rank #3 stock has an Earnings ESP of +22.22%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Zacks Consensus Estimate for a loss of 36 cents has remained unchanged in the past 30 days.
Zillow Group, Inc. Price and EPS Surprise
Zillow Group, Inc. price-eps-surprise | Zillow Group, Inc. Quote
Synopsys’ first-quarter fiscal 2020 performance is likely to have benefited from increasing demand for its strong product portfolio.
This Zacks #3 Ranked player is unlikely to beat estimates because it has an Earnings ESP of 0.00%.
The Zacks Consensus Estimate for earnings has remained unchanged in the past 30 days at 92 cents. (Read more: Synopsys to Report Q1 Earnings: What's in the Offing?)
Five9’s fourth-quarter 2019 performance is expected to have benefited from consistent increase in the number of big deals driven by its partner ecosystem.
However, the company has a combination of a Zacks Rank #2 and an Earnings ESP of 0.00%.
The consensus mark for earnings has remained unchanged at 22 cents per share in the past 30 days.
Q2 Holdings’ fourth-quarter 2019 performance is likely to have benefited from an increase in subscription and services revenues. The acquisition of PrecisionLender is likely to have been a tailwind.
The Zacks Consensus Estimate for earnings has remained unchanged in the past 30 days at 10 cents.
Although Q2 has a Zacks Rank #2, its Earnings ESP of 0.00% makes surprise prediction difficult.
Q2 Holdings, Inc. Price and EPS Surprise
Q2 Holdings, Inc. price-eps-surprise | Q2 Holdings, Inc. Quote
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Microsoft Corporation (MSFT): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Synopsys, Inc. (SNPS): Free Stock Analysis Report
Zillow Group, Inc. (ZG): Free Stock Analysis Report
Five9, Inc. (FIVN): Free Stock Analysis Report
Q2 Holdings, Inc. (QTWO): Free Stock Analysis Report
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Zacks Investment Research