Why Almost Family (AFAM) Could Beat Earnings Estimates Again - Tale of the Tape

by Zacks, Benzinga Contributor
June 10, 2014 10:10 AM | 2 min read |

Looking for a stock that might be in a good position to beat earnings at its next report? Consider Almost Family Inc. AFAM, a firm in the Home Health Care industry, which could be a great candidate for another beat.

This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, AFAM has beaten estimates by at least 15% in both cases, suggesting it has a nice short-term history of crushing expectations.
    
Earnings in Focus

Two quarters ago, AFAM expected to earn 26 cents per share, while it actually reported earnings of 30 cents per share, a beat of 15.4%. Meanwhile, for the most recent quarter, the company looked to deliver earnings of 29 cents a share, when it actually saw earnings of 34cents per share instead, representing a 17.2% positive surprise.

Thanks in part to this history, recent estimates have been moving higher for Almost Family. In fact, the Earnings ESP for AFAM is positive, which is a great sign of a coming beat.

After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company's earnings prospects. This is the case for AFAM, as the firm currently has a Zacks Earnings ESP of 5.88%, so another beat could be around the corner.

This is particularly true when you consider that AFAM has a great Zacks Rank #1 (Strong Buy) which can be a harbinger of outperformance and a signal for a strong earnings profile. And when you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that AFAM could see another beat at its next report, especially if recent trends are any guide.

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