Will Lightspeed Commerce Inc. (LSPD) Report Negative Earnings Next Week? What You Should Know

Wall Street is expecting flat earnings compared to the year-ago quarter on higher revenue when Lightspeed Commerce Inc. (LSPD) reports results for the quarter ended September 2022. While this widely-known consensus forecast is important for assessing the company’s earnings situation, a strong factor that could affect its stock price in the near term is how well actual results compare to those estimates.

The stock could rise if these key numbers beat expectations in the upcoming earnings report, due November 3. On the other hand, if they fall short of expectations, the stock could fall.

While management’s discussion of business conditions during the earnings conference call will have the greatest impact on the sustainability of immediate price action and future earnings expectations, it’s worth having insight into the likelihood of a positive earnings surprise.

Zacks Consensus Estimate

The company is expected to report a loss of $0.08 per share in its upcoming quarterly report, unchanged from the same quarter last year.

Revenue is expected to be $182 million, up 36.6% from the same quarter last year.

Estimate the trend of change

The consensus EPS estimate for the quarter remained unchanged over the past 30 days. This is essentially a reflection of how the analysts covering the aggregate have reassessed their initial estimates during that period.

Investors should note that the direction of each analyst’s estimate revisions will not always be reflected in the aggregate change.

Whispers about earnings

Estimate revisions prior to a company’s earnings release provide an indication of business conditions during the earnings release period. This insight is the basis of our proprietary surprise forecasting model, the Zacks Earnings ESP (Expected Surprise Prediction).

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ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a newer version of the Zacks Consensus EPS estimate.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

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 produce a positive surprise almost 70% of the time, and a solid Zacks Rank actually enhances 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).

How the numbers are shaping up for Lightspeed Commerce Inc.

For Lightspeed Commerce Inc. The Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting analysts have recently become bearish on the company’s earnings prospects. This resulted in an Earnings ESP of -12.50%.

On the other hand, the stock currently has a Zacks Rank of #3.

Therefore, this combination makes it difficult to clearly predict that Lightspeed Commerce Inc. will exceed consensus EPS estimates.

Does the history of surprising results have any clue?

When calculating estimates of a company’s future earnings, analysts often consider how well the company has managed to match prior consensus estimates. So it’s worth taking a look at the surprising story to gauge its impact on the upcoming numbers.

For the last quarter, it was expected that Lightspeed Commerce Inc. would post a loss of $0.12 per share when it actually produced a loss of $0.12, which came as no surprise.

The company has beaten consensus earnings per share estimates twice over the last four quarters.

Bottom Line

Beating or missing earnings may not be the only basis for a stock rising or falling. Many stocks lose ground despite beating gains due to other factors that disappoint investors. Similarly, unforeseen catalysts help many stocks gain despite missing earnings.

That said, betting on stocks that are expected to exceed earnings expectations increases your chances of success. Therefore, it is worth checking the company’s Earnings Rank and Zacks Rank before their quarterly release. Use our Earnings ESP filter to find the best stocks to buy or sell before they report.

Lightspeed Commerce Inc. doesn’t seem like a strong candidate for an earnings beat, but there are other factors investors should look at if they want to bet against or stay away from this stock ahead of its earnings release.

Expected results of an industry player

Among the stocks in the Zacks Technology Services industry, TuSimple (TSP) is expected to report a loss of $0.58 per share for the quarter ended September 2022. This estimate indicates a year-over-year change of -7.4%. Revenues for the quarter are expected to be $2.32 million, up 29.6% from the year-ago quarter.

Over the last 30 days, the consensus EPS estimate for TuSimple has been revised 3.1% to the current level. Nevertheless, the company now has an Earnings ESP of -4.91%, which reflects a lower Most Accurate Estimate.

Combined with the Zacks Rank #3 (Hold), the Earnings ESP makes it difficult to clearly predict that TuSimple will beat consensus EPS estimates. The company has topped consensus EPS estimates twice over the last four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today you can download the 7 best stocks for the next 30 days. Click to get this free report

Lightspeed Commerce Inc. (LSPD): Free Stock Analysis Report

TuSimple Holdings Inc. (TSP): Free Stock Analysis Report

To read this article on Zacks.com, click here.

Zacks Investment Research