Why Logitech (LOGI) Could Beat Earnings Estimates Again

If you are searching for a stock with a strong track record of surpassing earnings estimates, consider Logitech (LOGI). This company, a player in the Zacks Computer - Peripheral Equipment industry, seems well-positioned for another earnings beat in its upcoming quarterly report.

Logitech, known for its range of products like keyboards, webcams, and other computer accessories, has consistently demonstrated its ability to exceed earnings expectations. In fact, in its last two earnings releases, the company averaged a surprise of 18.03%.

In the last quarter, Logitech reported earnings of $1.20 per share, which was higher than the Zacks Consensus Estimate of $1.10, resulting in a surprise of 9.09%. In the quarter before that, while analysts were predicting earnings of $0.89, Logitech delivered $1.13 per share, producing a remarkable surprise of 26.97%.

This consistent performance has led to upward adjustments in earnings estimates for Logitech recently. Notably, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is currently positive. This is an encouraging sign for a potential earnings beat, particularly when coupled with a solid Zacks Rank.

Research indicates that stocks displaying a positive Earnings ESP along with a Zacks Rank of #3 (Hold) or better tend to achieve a positive surprise nearly 70% of the time. To put it simply, if you select 10 stocks with this combination, around seven could beat the consensus estimate.

The Zacks Earnings ESP operates by comparing the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate is essentially a refined version of the consensus estimate that reflects the latest changes made by analysts, making it potentially more accurate than earlier predictions.

Currently, Logitech holds an Earnings ESP of +4.96%, indicating that analysts have recently become more optimistic about the company's earnings outlook. When combined with a Zacks Rank of #2 (Buy), the indicators suggest that another positive earnings report could be on the horizon. The next earnings report from Logitech is expected to be released on January 28, 2025.

It's essential to highlight that having a negative Earnings ESP can decrease its predictive power; however, it does not automatically mean the company will miss its earnings forecast.

Many companies often surprise to the upside with their earnings reports, but that's not the only factor influencing share price movement. Conversely, certain stocks may maintain stability even after falling short of consensus estimates.

To boost the chances of success, it's important to consider a company's Earnings ESP prior to its quarterly release. Utilizing the Earnings ESP Filter can help identify the best stocks to consider buying or selling before they report their earnings.

Logitech, Earnings, Surprise