Yandex N. V. (NASDAQ:YNDX) is set to report FQ4 2013 earnings before the market opens on Thursday, February 20th. Yandex is the largest search engine in Russia, and controls about 60% market share within the country. Although Yandex competes with search giant Google (GOOG) in Russia and the Ukraine, growth expectations are still optimistic. Wall Street is forecasting that Yandex will grow FQ4 revenue by 34% compared to last year. In addition to its search engine business, Yandex also operates other internet technologies such as Yandex.Traffic to measure traffic congestion in cities and MatrixNet for machine learning. Here’s how investors expect Yandex to report this quarter.
The information below is derived from data submitted to the Estimize.com platform by a set of Buy Side and Independent analyst contributors.(Click Here to see All Estimates for Yandex)
The current Wall Street consensus expectation is for YNDX to report 31c EPS and $388.64M revenue while the current Estimize.com consensus from 13 Buy Side and Independent contributing analysts is 32c EPS and $391.47M revenue. This quarter the buy-side as represented by the Estimize.com community is expecting YNDX to beat Wall Street on both revenue and profit.
Throughout the previous 5 quarters for which there is data, the consensus from Estimize.com has been more accurate than Wall Street in forecasting Yandex’s EPS and revenue 4 and 2 times respectively. By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non professional investors Estimize has created a data set that is up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market’s actual expectations. It has been confirmed by an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus.
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 compared to other quarters.
The distribution of estimates published by analysts on the Estimize.com platform range from 26c to 38c EPS and $388.50M to $402.23M in revenues. This quarter we’re seeing a large distribution of estimates for YNDX.
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 of estimates signals less agreement in the market, which could mean greater volatility post earnings.
This quarter the Wall Street EPS and revenue consensuses both remained flat throughout the quarter. Over the same period of time the Estimize consensus was volatile with the EPS consensus both starting and ending the period at 32c while the revenue forecast inched higher from $391.43M to $391.47M. Timeliness is correlated with accuracy, however, it is hard to make any sense of the volatility in analyst revisions other than to say there is uncertainty in the market, which agrees with the wide range of estimates we are seeing this quarter.
The analyst with the highest estimate confidence rating this quarter is sriramv, who projects 30c EPS and $389.14M in revenue. In the winter 2014 season, sriramv is rated as the 102nd best analyst and is ranked 122nd overall among over 3,850 contributing analysts. Estimate confidence ratings are calculated through algorithms developed by deep quantitative research, which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case sriramv is making a bearish call expecting Yandex to miss the Estimize consensus on both EPS and revenue.
While Wall Street expectations are high for Yandex this quarter, contributing analysts on the Estimize.com platform have even loftier expectations. Thursday morning the Estimize community expects Yandex to report 35% year over year revenue growth and 23% growth in EPS.