Will Xoom Corp (XOOM) Disappoint Q3 Earnings Estimates?
Xoom Corporation (XOOM) is set to report third-quarter 2014 earnings results on Oct 28, 2014. Last quarter, it delivered an earnings surprise of a significant 200%. Let us see how things are shaping up for this announcement.
Factors Affecting the Past Quarter
Xoom Corporation took a couple of initiatives in the last quarter that should help it to boost earnings. These include the company’s partnership with The Filipino Channel (:TFC) in order to provide a six-month TFC.tv subscription to Xoom’s customers who will send more than $100 to the Philippines. Additionally, the company expanded its instant deposit service to the Indian financial service giant ICICI Bank. This deal enables Xoom Corporation’s customers to deposit money instantly to the recipient’s ICICI Bank account. These deals should attract more customers as well as help Xoom Corporation retain its existing customers, thereby enhancing company revenues.
However, a decline in new customers in the last reported quarter despite the growth initiatives raises some concern regarding this quarter’s earnings beat.
Earnings Whispers?
Our proven model does not conclusively show that Xoom Corporation is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Xoom Corporation has an ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at a loss of 3 cents per share, making the difference 0.00%.
Zacks Rank: Xoom Corporation’s Zacks Rank #3 (Hold) increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some companies in the financial services space you may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Heartland Payment Systems, Inc. (HPY) has Earnings ESP of +1.67% and a Zacks Rank #1 (Strong Buy).
Green Dot Corporation (GDOT) has Earnings ESP of +8.00% and a Zacks Rank #3.
Santander Consumer USA Holdings Inc. (SC) has Earnings ESP of +3.23% and a Zacks Rank #3.
Read the Full Research Report on GDOT
Read the Full Research Report on HPY
Read the Full Research Report on XOOM
Read the Full Research Report on SC
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