Watching For Synchronoss Technologies' Q3 Earnings Report

By Brendan Gilmartin


Synchronoss Technologies (NASDAQ:SNCR) is scheduled to report 3Q 2011 earnings after the close of trading on Tuesday, November 1. After slipping to as low as $23 earlier this month, Synchronoss shares are up more than 30%, having recaptured the 200-Day SMA near $30. The shift in momentum is partially attributable to the early response to Apple’s (NASDAQ:AAPL) iPhone 4S. Earlier this month, the company disclosed it was expanding its role in the activation process for the popular device, while providing services to Verizon (NYSE:VZ), Sprint-Nextel (NYSE:S), and AT&T (NYSE:T).

For its part, Sychronoss provides software and activation services for mobile carriers. Synchronoss’ SmartMobility integrated with the ConvergenceNow Plus platform enables users to activate or update new devices more seamlessly, while synchronizing contacts and content using cloud-enabled technology. With the growing adoption of smart phones in the U.S. and abroad, Synchronoss is benefiting from the trends in closed computing and adoption of connected devices.

Synchronoss previously indicated it expects non-GAAP EPS in the range of $0.21 to $0.22 on revenue of $57 to $59 million, an increase of 22% to 26% over the previous year. Given the recent advance in the share price and improving sentiment, results at the mid-range or below company estimates could prove to be disappointing.

Chart Review

  • Synchronoss shares recently climbed back above the 200-Day SMA for the first time since early August. That will be a key level to watch in reaction to the earnings release.
  • There is soft resistance near $33, followed by the recent highs at $35.
  • Support is at $28/$29, followed by $27 (20-Day SMA).
  • The upward-sloping Relative Strength Index (RSI), improving MACD, and 20-Day SMA crossover above the 50-Day all reflect the improving momentum.
  • Note that short interest is fairly high at nearly 15% of the float, offering potential support in the event of a downside surprise.

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