Tech Data Corp. (TECD) has experienced a volatile year with stock prices frequently climbing and falling between the range of $43.02 and $54.60. The Florida based wholesaler of technology products is scheduled to report its FQ3 2014 earnings on Tuesday, December 24th.
The current Wall Street consensus expectation is for TECD to report $1.24 EPS and $6.786B revenue, while the current Estimize consensus from Buy Side and Independent contributing analysts is $1.27 EPS and $6.789B revenue.
The Estimize consensus is more accurate than Wall Street up to 69.5% of the time because it represents unbiased market expectations.. By tapping into a wider distribution of over 3,300 contributors including hedge funds and independent analysts as well as students and non professionals, Estimize is better able to capture the true market outlook. Over the past 2 quarters for which we have had data, Estimize has been more accurate on EPS both times and once on revenue.
The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case we are seeing an average differential between the consensuses.
Over the past four months the Wall Street consensus trend for EPS has dropped from $1.29 to $1.24, while Wall Street revenue expectations have increased from $6.722B to $6.786B. The Estimize EPS consensus inched up from $1.26 to $1.27 and the revenue consensus has increased from $6.780B to $6.789B at the end of quarter.
The distribution of estimates published by analysts on Estimize range from $1.24 to $1.30 EPS and $6.766B to $6.846B in revenues. This quarter, both Wall Street's EPS and revenue expectations fall within the range our analysts are forecasting. Additionally we're seeing a moderate distribution of estimates this quarter for TECD. The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wider distribution signaling the potential for greater volatility post earnings, a smaller vice versa.
The analyst with the highest estimate confidence rating this quarter is 1nvestor, who projects $1.26 EPS and $6.785B in revenue. Estimate confidence ratings are calculated through algorithms developed by our deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case the analyst with the top confidence rating is expecting more profit per share but slightly less revenue than Wall Street.
This quarter the Estimize community is expecting Tech Data to beat Wall Street on both EPS and revenues. Over the past 6 quarters TECD has failed to meet Wall Street expectations for profit 4 times which has contributed to the volatility the stock has faced. If Tech Data can live up to the market's expectations on Tuesday it could help to calm investors nerves and get the stock back on track.