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Can TD Ameritrade (AMTD) Sustain Earnings Beat Streak in Q3?
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TD Ameritrade Holding Corporation (AMTD - Free Report) is scheduled to report third-quarter fiscal 2018 results, after the market closes on Jul 23. The company is expected to report year-over-year growth in revenues and earnings.
This Omaha-based investment broker has an impressive earnings surprise history, beating the Zacks Consensus Estimate in each of the trailing four quarters with an average beat of 18%.
Before we discuss why an earnings beat might be in store this time also, let’s take a look at how the company performed in the last reported quarter.
In second-quarter fiscal 2018, results benefited from the rising interest rates and improved volatility in the markets. Net interest margin expansion led to growth in revenues. Also, increase in average client trades per day was reported, indicating improvement in trading activity. However, the positives were partially offset by elevated expenses.
Backed by a positive earnings surprise history and strong fundamentals, shares of TD Ameritrade have rallied 14.9% year to date against the industry’s decline of 1.3%.
TD Ameritrade Holding Corporation Price and EPS Surprise
Will the stock’s rally continue post fiscal third-quarter earnings release? To a great extent, it depends on whether the company will be able to beat earnings estimates this time around.
According to our quantitative model, chances of TD Ameritrade beating the Zacks Consensus Estimate in this quarter are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to be confident of an earnings surprise call.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP for TD Ameritrade is +0.16%.
Zacks Rank: TD Ameritrade carries a Zacks Rank of 3.
Activities of TD Ameritrade during the quarter were inadequate to win analysts’ confidence as reflected by earnings estimates remaining stable at 79 cents, over the last seven days. Nevertheless, it reflects a year-over-year improvement of 79.6%.
Now let’s have a look at the factors that might drive fiscal third-quarter results:
Interest revenues to grow: With the gradually improving rate environment, margin pressure for TD Ameritrade seems to be easing. Thus, its interest revenues are likely to have improved during the quarter.
Also, higher year-over-year average interest earnings assets, as was reported in monthly metrics report for first two months of the quarter, is likely to support top-line growth.
Continued client asset growth: TD Ameritrade’s monthly metrics report reflects rise in client assets for April and May on a year-over-year basis. Thus, despite a slowdown in market volatility in the to-be-reported quarter, the broker’s fee-based revenues are expected to witness a modest improvement.
Overall, the Zacks Consensus Estimate for TD Ameritrade’s sales of $1.35 billion projects 44.9% improvement year over year.
Expenses likely to remain under control: Since the conversion of Scottrade clearing platform has been completed, TD Ameritrade’s expenses are likely to have declined during the quarter. Also, its headcount reduction efforts will further help reduce expenses. However, the company’s ongoing investments in technology are likely to offset the positives.
State Street (STT - Free Report) has an Earnings ESP of +0.28% and a Zacks Rank #3. It is scheduled to release results on Jul 20.
SunTrust Banks (STI - Free Report) is scheduled to release results on Jul 20. It has an Earnings ESP of +0.31% and carries a Zacks Rank of 2.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Can TD Ameritrade (AMTD) Sustain Earnings Beat Streak in Q3?
TD Ameritrade Holding Corporation (AMTD - Free Report) is scheduled to report third-quarter fiscal 2018 results, after the market closes on Jul 23. The company is expected to report year-over-year growth in revenues and earnings.
This Omaha-based investment broker has an impressive earnings surprise history, beating the Zacks Consensus Estimate in each of the trailing four quarters with an average beat of 18%.
Before we discuss why an earnings beat might be in store this time also, let’s take a look at how the company performed in the last reported quarter.
In second-quarter fiscal 2018, results benefited from the rising interest rates and improved volatility in the markets. Net interest margin expansion led to growth in revenues. Also, increase in average client trades per day was reported, indicating improvement in trading activity. However, the positives were partially offset by elevated expenses.
Backed by a positive earnings surprise history and strong fundamentals, shares of TD Ameritrade have rallied 14.9% year to date against the industry’s decline of 1.3%.
TD Ameritrade Holding Corporation Price and EPS Surprise
TD Ameritrade Holding Corporation Price and EPS Surprise | TD Ameritrade Holding Corporation Quote
Will the stock’s rally continue post fiscal third-quarter earnings release? To a great extent, it depends on whether the company will be able to beat earnings estimates this time around.
According to our quantitative model, chances of TD Ameritrade beating the Zacks Consensus Estimate in this quarter are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to be confident of an earnings surprise call.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP for TD Ameritrade is +0.16%.
Zacks Rank: TD Ameritrade carries a Zacks Rank of 3.
Activities of TD Ameritrade during the quarter were inadequate to win analysts’ confidence as reflected by earnings estimates remaining stable at 79 cents, over the last seven days. Nevertheless, it reflects a year-over-year improvement of 79.6%.
Now let’s have a look at the factors that might drive fiscal third-quarter results:
Interest revenues to grow: With the gradually improving rate environment, margin pressure for TD Ameritrade seems to be easing. Thus, its interest revenues are likely to have improved during the quarter.
Also, higher year-over-year average interest earnings assets, as was reported in monthly metrics report for first two months of the quarter, is likely to support top-line growth.
Continued client asset growth: TD Ameritrade’s monthly metrics report reflects rise in client assets for April and May on a year-over-year basis. Thus, despite a slowdown in market volatility in the to-be-reported quarter, the broker’s fee-based revenues are expected to witness a modest improvement.
Overall, the Zacks Consensus Estimate for TD Ameritrade’s sales of $1.35 billion projects 44.9% improvement year over year.
Expenses likely to remain under control: Since the conversion of Scottrade clearing platform has been completed, TD Ameritrade’s expenses are likely to have declined during the quarter. Also, its headcount reduction efforts will further help reduce expenses. However, the company’s ongoing investments in technology are likely to offset the positives.
Other Stocks That Warrant a Look
Legg Mason is slated to release results on Jul 25. It has an Earnings ESP of +1.22% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
State Street (STT - Free Report) has an Earnings ESP of +0.28% and a Zacks Rank #3. It is scheduled to release results on Jul 20.
SunTrust Banks (STI - Free Report) is scheduled to release results on Jul 20. It has an Earnings ESP of +0.31% and carries a Zacks Rank of 2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>