Will MobileIron's (MOBL) Q4 Earnings Pull Off A Surprise?

MobileIron Inc. MOBL is set to report fourth-quarter 2016 results on Nov 7. Last quarter, the company posted a positive earnings surprise of 27.27%. Adjusted loss of 7 cents per share (excluding stock-based compensation) was much narrower than the year-ago loss figure of 17 cents.

Share price declined more than 4% following the results reflecting modest revenue and billings growth forecast. However, in Jan 2017, the company raised its revenue and billings guidance and also announced that it has generated approximately $8 million of cash from operations in the quarter. Following the news shares climbed more than 6%.

Notably, MobileIron has beaten the Zacks Consensus Estimate in two of the preceding four quarters with an average positive earnings surprise of 12.11%. Moreover, the company has outperformed the Zacks Internet Software industry in the last one-year. While the stock has gained 33.3%, the industry returned 11.7% in the same period.

Let's see how things are shaping up for this announcement.

Factors to Consider

MobileIron provides security and management solutions for mobile applications, contents and devices. Its offerings include multi-OS mobile device management software, mobile application management, wireless expense management, enterprise mobility, mobile device security, Bring-Your-Own-Device (BYOD) privacy controls, and MobileIron Virtual Smartphone Platform.

We believe that MobileIron has significant growth prospect from increasing adoption of BYOD and Internet of Things (IoT) trends. Per research firm Markets and Markets, the cyber security market is estimated to grow from $122.45 billion in 2016 to $202.36 billion by 2021, representing a CAGR of 10.6%.

The company’s products have been selected by the likes of synfis Service GmbH, Brother Industries, Jung von Matt, Buurtzorg, and PRIVERA in recent times. More importantly customers like synfis replaced an established platform like Blackberry BBRY with MobileIron’s enterprise mobility management (EMM) platform. This trend is significantly positive for MobileIron’s growth prospects going ahead.
 

MobileIron, Inc. Price and EPS Surprise

 

MobileIron, Inc. Price and EPS Surprise | MobileIron, Inc. Quote

Earnings Whispers

Our proven model does not conclusively show that MobileIron is likely to beat estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to surpass estimates. However, that is not the case here due to the following factors:

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stands at a loss of 14 cents per share. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: MobileIron currently carries a Zacks Rank #3, which when combined with a 0.00% ESP, makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some stocks which, as per our model, have the right combination of elements to post an earnings beat this quarter:

Applied Optoelectronics AAOI with an Earnings ESP of +15.87% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pure Storage PSTG with an Earnings ESP of +4.17% and a Zacks Rank #2.

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