Wall Street expects a year-over-year decline in earnings on lower revenues when Ally Financial (ALLY) reports results for the quarter ended September 2020. While this widely-known consensus outlook is important in gauging the company’s earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.
The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 16. On the other hand, if they miss, the stock may move lower.
While management’s discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it’s worth having a handicapping insight into the odds of a positive EPS surprise.
Zacks Consensus Estimate
This auto finance company and bank is expected to post quarterly earnings of $0.60 per share in its upcoming report, which represents a year-over-year change of -40.6%.
Revenues are expected to be $1.50 billion, down 6.3% from the year-ago quarter.
Estimate Revisions Trend
The consensus EPS estimate for the quarter has been revised 158.41% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
Price, Consensus and EPS Surprise
Estimate revisions ahead of a company’s earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model — the Zacks Earnings ESP (Expected Surprise Prediction) — has this insight at its core.
The Zacks Earnings ESP compares the Most Accurate Estimate