If you’re trying to build your earnings season watchlist by looking for stocks setting up in a base ahead of their next earnings report, here’s one that fits the bill: Cybersecurity firm Mimecast (MIME). It’s expected to report on Nov. 2 and on Tuesday Mimecast stock briefly topped a 71.55 entry. The current formation is a second-stage cup without handle.
The U.K.-based company offers cloud security services for companies across a broad range of industries.
Mimecast Stock Holds Near-Best Rating
Among its key ratings, Mimecast stock has a near-best 97 IBD Composite Rating, of a best-possible 99, putting it in the top 3% of all companies on a range of technical and fundamental metrics. It also boasts a 96 EPS Rating and a 92 Relative Strength Rating, which compares a stock’s price performance against the entire S&P 500.
In terms of fundamentals, earnings per share popped 45% last quarter to 32 cents per share, giving Mimecast stock a boost. That followed EPS growth of 146%, 136% and 87% the prior three quarters. Revenue last quarter climbed 24% to $142.6 million, accelerating from 17% growth the prior quarter.
Consensus analyst estimates call for EPS growth of 3% for the quarter, and 11% growth for the full year. Earnings-per-share estimates for the full year were recently revised higher. Mimecast stock eased 0.4% Tuesday afternoon after hitting a 71.84 all-time high earlier.
Peers In Computer Security Software Group
Mimecast stock has the No. 2 rank among its peers in the Computer Software-Security industry group. Fortinet (FTNT) is the No. 1-ranked stock within the group. CrowdStrike (CRWD) is No. 3. The overall group is ranked a lofty No. 9 on IBD’s list of 197 industry groups.
Be aware that jumping into a stock right as it gets ready to report means you likely won’t have enough time to build a profit cushion before the release. That leaves you exposed to a sudden downturn if the company disappoints investors with poor numbers and/or weak guidance. You can minimize your risk by waiting to see how the company reports and how the market reacts. You can also use an options strategy to limit your potential downside.
Note: Dates for earnings reports are subject to change. Check the company’s website for any updates.
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