Quantum Corp. (QMCO) Announces First Quarter Loss, Exceeds Revenue Estimates

Quantum Corp. (QMCO) posted a quarterly loss of $0.04 per share, in line with Zacks’ consensus estimate. This compares to the earnings per share breakeven a year ago. These figures are adjusted for non-recurring items.

A quarter ago, this computer storage device maker was expected to post a loss of $0.06 per share when it actually produced a loss of $0.04, delivering a surprise of 33.33%.

In the past four quarters, the company has exceeded consensus EPS estimates twice.

Quantum Corp., which is part of the Zacks Computer-Storage Devices industry, posted revenue of $97.07 million for the quarter ended June 2022, beating Zacks’ consensus estimate of 3.09%. That compares to revenues of $89.1 million a year ago. The company has exceeded consensus revenue estimates three times in the past four quarters.

The sustainability of the immediate stock price movement based on recently released numbers and future earnings forecasts will primarily depend on management’s comments on the earnings call.

The shares of Quantum Corp. have lost around 65% since the start of the year compared to the -12.8% decline in the S&P 500.

What’s next for Quantum Corp.

While Quantum Corp. has underperformed the market so far this year, the question on investors’ minds is: what’s next for the stock?

There is no easy answer to this key question, but a reliable measure that can help investors answer it is the company’s earnings outlook. This includes not only current consensus earnings expectations for the upcoming quarter(s), but also how those expectations have changed recently.

Empirical research shows a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track these revisions on their own or rely on a proven scoring tool like Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Prior to this earnings release, the trend in estimate revisions for Quantum Corp. Mixed. While the magnitude and direction of estimate revisions may change following the release of the company’s earnings report, the current situation translates into a No. 3 (hold) Zacks ranking for the stock. Thus, the shares should move in line with the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the next few quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.02 on $95.03 million in revenue for the upcoming quarter and -$0.03 on $386.95 million in revenue for the current fiscal year .

Investors should be aware that the outlook for the sector can also have a significant impact on stock performance. In terms of Zacks industry rankings, computer storage devices are currently in 38% of Zacks more than 250 industries. Our research shows that the top 50% of industries ranked by Zacks outperform the bottom 50% by a factor of more than 2 to 1.

Another stock in the same sector, Super Micro Computer (SMCI), has not yet released its results for the quarter ended June 2022. The results are expected to be released on August 9.

This server technology company is expected to post quarterly earnings of $2.35 per share in its next report, representing a year-over-year change of +190.1%. The consensus EPS estimate for the quarter remained unchanged for the past 30 days.

Super Micro Computer’s revenue is expected to be $1.61 billion, up 50.1% from the prior year quarter.

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