Inseego (INSG) to Report Second-Quarter 2024 Results: What to Expect
Inseego (INSG) is set to report its second-quarter 2024 financial results on August 7th. The company anticipates revenue in the range of $52-$56 million, suggesting a marginal increase compared to the previous year. However, the Zacks Consensus Estimate stands at $53.63 million, pointing toward modest growth. While the consensus earnings per share prediction remains steady at 3 cents over the past 30 days, the company’s earnings history shows a mixed bag of beats and misses, with an average negative surprise of 181.39% over the trailing four quarters.
Key Takeaways:
- Inseego expects robust carrier demand for its mobile products, driven by structural demand and promotional activities, to contribute positively to Q2 performance.
- Continued growth in the Fixed Wireless Access (FWA) business, fueled by the rebranding and relaunch of the Inseego Ignite channel program, is anticipated.
- Increased revenues from subscription renewals, SaaS offerings, and services are projected, driven by a renewal contract with a key carrier partner and added revenues from subscription expansion and professional services.
- The new Inseego Ignite channel program is showing positive results and expected to diversify the company’s revenue base and expand its go-to-market capabilities.
Key Factors to Consider for Q2 Performance:
H2 Mobile Product Demand:
H3 Strong Carrier Demand: Inseego is likely to benefit from robust carrier demand for its mobile products, particularly driven by structural demand and promotional activities from its carrier customers.
H2 Fixed Wireless Access Growth:
H3 Early Traction for Inseego Ignite: Inseego expects ongoing growth in its Fixed Wireless Access (FWA) business due to early traction from its rebranded and relaunched Inseego Ignite channel program. This program aims to boost FWA sales by providing a broader range of solutions and services.
H2 Continued Revenue Growth:
H3 Subscription Renewals and SaaS Boost: Inseego anticipates increased revenues from subscription renewals and SaaS offerings. They are particularly optimistic about the impact of a renewal contract with a key carrier partner that will boost revenue and profitability for the next two years.
H3 Services and Other Revenue Growth: The company attributes probable sequential growth in services and other revenues primarily to added revenue from a subscription renewal, which includes SaaS subscription expansion and increased professional services revenues.
H2 New Channel Program: Inseego Ignite:
H3 Positive Results and Diversified Revenue: Inseego Ignite, the company’s new channel program, is showing positive results and contributing to increased revenues by diversifying the revenue base and expanding go-to-market capabilities.
Zacks Model Outlook:
The Zacks model, which analyzes earnings estimates and company fundamentals, suggests that the combination of a positive Earnings ESP (Earnings Surprise Prediction) and a Zacks Rank #1 (Strong Buy), #2 (Buy), or #3 (Hold) increases the likelihood of an earnings beat.
However, Inseego currently has an Earnings ESP of 0.00% and a Zacks Rank #3, indicating a less certain outlook for a surprise earnings performance.
Stocks to Consider:
While Inseego’s outlook remains uncertain, investors looking for potential earnings beats might consider these companies that demonstrate a favorable combination of Earnings ESP and Zacks Rank:
Shopify (SHOP):
- Earnings ESP: +7.78%
- Zacks Rank: #2 (Buy)
Shopify is scheduled to report its second-quarter 2024 results on August 7th. While the company’s shares have declined by 30.1% year-to-date, its strong Earnings ESP and Zacks Rank suggest potential for an earnings beat.
DigitalOcean (DOCN):
- Earnings ESP: +2.19%
- Zacks Rank: #1 (Strong Buy)
DigitalOcean is set to report its second-quarter 2024 results on August 8th. Despite a 21.8% year-to-date decline in its shares, DigitalOcean’s positive Earnings ESP and top Zacks Rank position it as a potential candidate for an earnings beat.
MKSI:
- Earnings ESP: +7.28%
- Zacks Rank: #1 (Strong Buy)
MKSI is scheduled to report its second-quarter 2024 results on August 7th. The company’s shares have gained 3.6% year-to-date. With a robust Earnings ESP and a top Zacks Rank, MKSI presents a compelling opportunity for an earnings beat.
In conclusion, Inseego’s second-quarter 2024 results are anticipated to reflect continued growth in mobile product demand, FWA business, and subscription/service revenue streams. While the Zacks model does not suggest a high likelihood of an earnings beat, the company’s positive developments in key areas like the new channel program and carrier demand warrant closer observation. Investors considering alternative options for potential earnings beats might find the performance of Shopify, DigitalOcean, and MKSI particularly interesting.
