Netlist, Inc. (NLST) Reports Second Quarter Loss, Top Revenue Estimates

Netlist, Inc. (NLST) reported a quarterly loss of $0.02 per share compared to the Zacks Consensus Estimate of a loss of $0.03. For comparison, a year earlier earnings per share were $0.12. These numbers have been adjusted for one-off items.

This quarterly report presented an earnings surprise of 33.33%. A quarter ago, it was expected that this company would post a loss of $0.03 per share when it actually produced a loss of $0.03, which was no surprise.

The company has topped consensus EPS estimates twice over the last four quarters.

Netlist, Inc., which belongs to the Zacks Computer-Storage Devices industry, posted revenues of $55.36 million for the quarter ended June 2022, surpassing the Zacks Consensus Estimate by 10.28%. For comparison, revenues from the previous year amounted to $64.36 million. The company has topped consensus revenue estimates three 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.

Since the beginning of the year, shares of Netlist, Inc. they lost approximately 50.4% compared to the S&P 500 index’s decline of -13.6%.

What’s next for Netlist, Inc.

Although Netlist, Inc. has underperformed the market this year, the question that comes to investors’ minds 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.

Leading up to the earnings release, the trend in estimate revisions for Netlist, Inc. 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 $55.2M for the coming quarter and -$0.11 on revenue of $214.3M 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 Storage Devices is currently in the top 32% 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.

Pure Storage (PSTG), another company in the same industry, is yet to report results for the quarter ended July 2022.

The data storage company is expected to post quarterly earnings of $0.22 per share in its upcoming report, representing a year-over-year change of +57.1%. The consensus EPS estimate for the quarter has not changed over the last 30 days.

Pure Storage’s revenue is expected to be $636.82 million, up 28.2% from the same quarter last year.

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