Iteris (ITI) announces break-even for the fourth quarter

Iteris (ITI) reported breakeven quarterly earnings per share versus the Zacks Consensus Estimate of $0.03. For comparison, a year earlier the loss was $0.01 per share. These numbers have been adjusted for one-off items.

This quarterly report presented an earnings surprise of -100%. A quarter ago, it was expected that this vehicle detection and traffic control company would post earnings of $0.01 per share when it actually produced earnings of $0.01, which was no surprise.

Over the last four quarters, the company has surpassed consensus EPS estimates only once.

Iteris, which belongs to the Zacks Computer – Integrated Systems industry, posted revenues of $42.75 million for the quarter ended March 2024, surpassing the Zacks Consensus Estimate by 1.79%. For comparison, revenues from a year ago amounted to $42.44 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.

Iteris shares have lost about 15% since the beginning of the year compared to the S&P 500’s increase of 13.7%.

What’s next for Iteris?

Although Iteris has underperformed the market this year, the question that arises for investors is: what’s next for the stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of the earnings release, the estimate revision trend for Iteris is mixed. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) stock. Therefore, the company’s stock is expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is $0.03 on revenue of $44.93 million for the coming quarter and $0.23 on revenue of $189.61 million for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, Computer Integrated Systems is currently in the top 31% of over 250 Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the broader Zacks Computer and Technology sector, Daktronics (DAKT), is yet to report earnings for the quarter ended April 2024.

The video display maker is expected to post quarterly earnings per share of $0.14 in its upcoming report, representing a year-over-year change of -70.2%. The consensus EPS estimate for the quarter has not changed over the last 30 days.

Daktronics revenue is expected to be $179.28 million, down 14.6% from the year-ago quarter.

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