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5 Technology Stocks Poised to Beat Earnings Estimates in Q1

The technology sector has been extremely resilient to the impact of COVID-19-induced disruptions. This is expected to drive first-quarter 2021 results for players in the sector.

Moreover, tech stocks have benefited from the ongoing coronavirus-led digitalization. Rapid adoption of cloud computing and the integration of AI and machine learning have been key catalysts.

Further, continuing work-from-home and online learning wave kept demand for remote-working tech, including advanced technology-based virtual meetings and conference tools, cloud services and cybersecurity solutions, high in the to-be-reported quarter.

Additionally, the work-and-learn-from-home necessity has propelled demand for PCs, notebooks, peripheral accessories and cloud storage. All of these, in turn, are fueling growth for high-speed Internet services.

In fact, per Gartner’s latest report, global PC shipments recorded the fastest year-over-year growth in first-quarter 2021 in more than two decades. Per Gartner, a total 69.9 million PCs were shipped during the quarter, up 32% from the year-ago period.

Additionally, short supply of chips has opened up opportunities for semiconductor companies.

Also, contactless payment and delivery have gained significant traction during the outbreak. Further, an e-commerce boom prompted by changing consumer behavior is expected to have benefited top-line growth.

How to Make the Right Pick?

With the presence of several industry players, finding the technology stocks having the potential to beat earnings estimates can be daunting. Our proprietary methodology, however, makes it fairly simple.

You could narrow down the list of choices by looking at stocks that have the combination of a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
 
Earnings ESP is our proprietary methodology for determining stocks, which have the best chances to surprise with their next earnings announcement. It is the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
 
Our research shows that for stocks with this apt combination of ingredients, the odds of a positive earnings surprise are as high as 70%.

Best Bets

Given below are five technology stocks that have the right combination of elements to beat on earnings this reporting cycle:

Brooklyn, NY-based Etsy ETSY has an Earnings ESP of +1.19% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is scheduled to report first-quarter 2021 results on May 5. The Zacks Consensus Estimate for its earnings has moved up by a couple of cents to 84 cents per share over the past 30 days.
 

Etsy, Inc. Price and EPS Surprise

Etsy, Inc. price-eps-surprise | Etsy, Inc. Quote

 

Phoenix, AZ-based Avnet AVT is scheduled to report third-quarter fiscal 2021 results on Apr 28.

The company has a Zacks Rank #2 and has an Earnings ESP of +0.89%.

The Zacks Consensus Estimate for earnings climbed by a penny to 56 cents per share over the past month.
 

Avnet, Inc. Price and EPS Surprise

Avnet, Inc. price-eps-surprise | Avnet, Inc. Quote

 

Waukesha, WI-based Generac Holdings GNRC has a Zacks Rank of 2 and an Earnings ESP of +2.97%. The company is scheduled to report first-quarter 2021 results on Apr 29.

The Zacks Consensus Estimate for earnings has been unchanged at $1.87 per share over the past 30 days.
 

Generac Holdings Inc. Price and EPS Surprise

Generac Holdings Inc. price-eps-surprise | Generac Holdings Inc. Quote

 

New York-based MSCI MSCI currently has a Zacks Rank #2 and an Earnings ESP of +2.49%.

The company is set to report first-quarter 2021 results on Apr 27. The consensus mark for earnings has risen 0.9% to $2.29 per share over the past 30 days.
 

MSCI Inc Price and EPS Surprise

MSCI Inc price-eps-surprise | MSCI Inc Quote

 

Sydney, Australia-based Atlassian TEAM is set to report third-quarter fiscal 2021 results on Apr 29. The company has an Earnings ESP of +24.48% and a Zacks Rank of 2.

The consensus estimate for earnings has surged 38.1% to 29 cents per share over the past 30 days.

 

Atlassian Corporation PLC Price and EPS Surprise

Atlassian Corporation PLC price-eps-surprise | Atlassian Corporation PLC Quote

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?

Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

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Avnet, Inc. (AVT): Free Stock Analysis Report
 
MSCI Inc (MSCI): Free Stock Analysis Report
 
Etsy, Inc. (ETSY): Free Stock Analysis Report
 
Atlassian Corporation PLC (TEAM): Get Free Report
 
Generac Holdings Inc. (GNRC): Free Stock Analysis Report
 
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