What you need to know before next week's release

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The Bank of Commerce (BOCH) is expected to record an increase in profit relative to an increase in its revenue when it publishes its results for the quarter ended in December 2018. These consensual perspectives are well known. good idea of ​​the situation The way in which actual results compare to these estimates is a powerful factor that could affect the price of its shares in the short term.

The stock could increase if these key figures exceed expectations in the next earnings report, which is expected to be released on 18 January. On the other hand, if it's missing, the stock could go down.

Although the durability of the immediate price change and future earnings forecasts depends primarily on the management's analysis of the companies' situation when the results are called, it should be avoided. probability of a positive surprise of BPA.

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This bank holding company is expected to post a quarterly profit of $ 0.24 per share in its next report, representing a year – on – year change of + 60%.

Revenues are expected to be $ 13.26 million, up 9.1% from the same quarter last year.

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The consensus estimate of EPS for the quarter remained unchanged over the last 30 days. This essentially reflects the way hedge analysts collectively reassessed their initial estimates over this period.

Investors should keep in mind that an overall change may not always reflect the direction of the revisions made by each of the analysts involved.

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Estimates revisions prior to the publication of a company's results provide clues to the trading conditions of the period whose results are being published. This idea is at the heart of our exclusive surprise prediction model – the Expected Surprise Prediction (ESP) Zacks Earnings.

The Zacks Earnings ESP compares the most accurate estimate with Zacks' consensus estimate for the quarter; The most accurate estimate is a version of Zacks consensus whose definition is likely to change. The idea here is that analysts who revise their estimates just before the release of the results have the most up-to-date information, which could potentially be more accurate than what they and other contributors to the consensus have. had predicted earlier.

Thus, a positive or negative reading of ESP earnings theoretically indicates the likely difference in real earnings from the consensus estimate. However, the predictive power of the model is significant for positive readings of ESP only.

A positive ESP profit is a strong predictor of earnings growth, especially when it is combined with a # 1 Zacks rank (strong buy), 2 (buy) or 3 (hold) . Our research shows that the actions combined with this combination generate a positive surprise nearly 70% of the time, and a strong Zacks ranking actually increases the predictive power of ESP profit.

Please note that a negative reading of ESP earnings is not indicative of a shortfall. Our research shows that it is difficult to predict with a reasonable degree of confidence a profit beating for equities with negative earnings ESP readings and / or Zack ranks of 4 (Sell) or 5 (Strong Sell).

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For Bank of Commerce, the most accurate estimate is the same as the consensus estimate of Zacks, suggesting that no recent analyst viewpoint differs from what has been considered as derived from the consensus estimate. This resulted in a profit PSE of 0%.

The story continues

On the other hand, the stock is currently ranked 3 by Zacks.

This combination makes it difficult to conclusively predict that Bank of Commerce will exceed EPS estimate by consensus.

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Analysts often examine the extent to which an enterprise has been able to match consensual estimates in the past while calculating its estimates for future earnings. It is therefore interesting to take a look at the history of surprises to measure its influence on the number to come.

For the last quarter published, it was expected that Bank of Commerce would record a profit of 0.22 USD per share while it gave a profit of 0.25 USD, generating a surprise of + 13.64%.

In the last four quarters, the company has exceeded consensus EPS estimates three times.

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A lost or missed gain may not be the only basis for a stock moving higher or lower. Many stocks end up losing ground despite profits being defeated because of other factors that disappoint investors. In the same way, unexpected catalysts help a certain number of titles to be won despite a shortfall.

That said, betting on stocks that should exceed earnings expectations increases the chances of success. This is why it is useful to consult the results of the ESP and Zacks Rank companies before their quarterly publication. Be sure to use our earnings ESP filter to find the best stock to buy or sell before your report is published.

Bank of Commerce does not seem to be a winning and winning candidate. However, investors should also pay attention to other factors to bet on this security or to deviate from it before the publication of its results.

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Bank of Commerce Holdings (CA) (BOCH): Free Stock Analysis Report

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Do you want to know the latest Zacks Investment Research recommendations? Today, you can download 7 best actions for the next 30 days. Click to get this free report

Bank of Commerce Holdings (CA) (BOCH): Free Stock Analysis Report

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

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