Accolade (ACCD) reports first-quarter loss, top revenue estimates

Accolade (ACCD) came out with a quarterly loss of $0.35 per share versus the Zacks Consensus Estimate of a loss of $0.48. That compares to a loss of $0.52 per share a year earlier. These numbers were adjusted for one-time items.

This quarterly report represents an earnings surprise of 27.08%. A quarter ago, it was expected that the company would post a loss of $0.11 per share when it actually produced a loss of $0.10, delivering a surprise of 9.09%.

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

Accolade, which belongs to the Zacks Technology Services industry, posted revenues of $110.47 million for the quarter ended May 2024, surpassing the Zacks Consensus Estimate by 5.20%. This compares to revenues of $93.23 million in the prior year. The company has surpassed consensus revenue estimates four times over the last four quarters.

The sustainability of current share price movements based on recently released data and future earnings expectations will depend primarily on management’s commentary following the earnings conference call.

Accolade shares have lost about 49% since the beginning of the year compared with the S&P 500’s gain of 14.9%.

What’s next for Accolade?

While Accolade has underperformed the market this year, investors are wondering: what’s next for this stock?

There are no easy answers to this key question, but one reliable metric that can help investors address this issue is the company’s earnings outlook. This includes not only the current consensus earnings expectations for the coming quarters, but also how those expectations have changed recently.

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 this earnings report, the estimate revision trend for Accolade is favorable. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. As such, the stock is expected to outperform 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 coming quarters and current fiscal year change in the coming days. The current consensus EPS estimate is -$0.44 on $112.94M in revenues for the coming quarter and -$1.23 on $490.58M in revenues for the current fiscal year.

Investors should be aware that industry prospects can also have a material impact on stock performance. In terms of the Zacks Industry Rank, Technology Services is currently in the top 23% of over 250 Zacks industries. Our research shows that the top 50% of Zacks industries outperform the bottom 50% by a factor of more than 2 to 1.

Spotify (SPOT), another company in the same industry, has not yet released results for the quarter ended June 2024.

The music streaming operator is expected to post quarterly earnings of $1.08 per share in its upcoming report, representing a year-over-year change of +163.9%. The consensus EPS estimate for the quarter has been revised upwards by 0.3% over the last 30 days to the current level.

Spotify revenue is expected to be $4.1 billion, up 18.5% from the same quarter last year.

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