Artisan Partners Asset Management (APAM) Q4 earnings expected to decline

Artisan Partners Asset Management (APAM) is expected to report a year-over-year earnings decline on lower revenue when it reports results for the quarter ended December 2018. This widely-known consensus forecast gives a good idea of ​​the company’s earnings picture, but how the actual results stack up against those estimates is a strong factor that could impact the stock’s price in the near term.

The earnings report, due out on February 4, 2019, could help the stock rise if those key numbers come out better than expected. On the other hand, if they fall short of expectations, the stock could fall.

While management’s discussion of operating conditions during the earnings conference call will have the greatest impact on the durability of the immediate price change and future earnings expectations, it is worth having insight into the likelihood of an upside earnings per share surprise.

Zacks Consensus Estimate

The investment management firm is expected to report quarterly earnings of $0.62 per share in its upcoming report, which would represent a year-over-year change of -6.1%.

Revenue is expected to be $193.15 million, down 8.3% from the prior-year quarter.

Estimate revision trend

The consensus EPS estimate for the quarter has been revised 11.86% down over the past 30 days to current levels. This is essentially a reflection of how the analysts covering the aggregate have reassessed their initial estimates during this period.

Investors should note that the total change may not necessarily reflect the direction of each analyst’s estimate revisions.

Price, Consensus and EPS Surprise

Whispers about earnings

Estimate revisions ahead of a company’s earnings release provide an indication of business conditions in the period in which the earnings are released. This knowledge is the basis for our proprietary Zacks Earnings ESP (Expected Surprise Prediction) surprise prediction model.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus that is subject to change. The idea is that the analysts revising their estimates just before an earnings release have the latest information, which could potentially be more accurate than what they and other contributors to the consensus had previously predicted.

So a positive or negative Earnings ESP reading theoretically indicates a likely deviation of actual earnings from consensus estimates. However, the model’s predictive power is only significant for positive ESP readings.

A positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold). Our research shows that stocks with this combination deliver a positive surprise almost 70% of the time, and a solid Zacks Rank actually boosts the predictive power of Earnings ESP.

It’s important to remember that a negative Earnings ESP reading does not indicate an earnings miss. Our research shows that it’s difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank 4 (Sell) or 5 (Strong Sell).

What are the numbers of craft partners?

In the case of Artisan Partners, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting there are no recent analyst views that differ from those considered in deriving the consensus estimate. This leads to an Earnings ESP of 0%.

On the other hand, the company’s stock currently sports a Zacks Rank #5.

Therefore, it is difficult to clearly predict that Artisan Partners will beat consensus earnings per share estimates.

Can history give any clues about financial performance?

When calculating a company’s future earnings estimates, analysts often consider how well it matched previous consensus estimates. So it’s worth looking at a surprising story to assess its impact on the upcoming numbers.

For the last reported quarter, Artisan Partners was expected to post earnings of $0.77 per share when it actually came to $0.79, delivering a surprise of +2.60%.

The company has topped consensus earnings per share estimates three times over the last four quarters.

Summary

Beating or missing earnings may not be the only reason a stock goes up or down. Many stocks lose ground despite beating earnings because of other factors that disappoint investors. Similarly, unforeseen catalysts help many stocks gain despite missing earnings.

That said, betting on stocks that are expected to beat earnings expectations increases the odds of success. That’s why it’s worth checking a company’s Earnings ESP and Zacks Rank ahead of its quarterly earnings release. Be sure to use our Earnings ESP Filter to discover the best stocks to buy or sell before they release.

Artisan Partners doesn’t seem like a compelling candidate for earnings outperformance. However, investors should look at other factors when betting on this stock or staying away from it ahead of its earnings release.

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