PProgress Software (PRGS) posted quarterly earnings of $0.92 per share, beating Zacks consensus estimate of $0.74 per share. That compares to earnings of $0.91 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents a profit surprise of 24.32%. A quarter ago, this enterprise software maker was expected to post earnings of $0.83 per share when it actually produced earnings of $1.18, offering a surprise 42 .17%.

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

Progress software, which is part of the Zacks Computer – Software industry, reported revenue of $143.73 million for the quarter ended November 2021, beating Zacks’ consensus estimate by 5.59%. That compares to revenues of $129.06 million a year ago. The company has exceeded consensus revenue estimates four 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.

Shares of Progress Software have lost about 4.9% year-to-date compared to a -2.2% decline for the S&P 500.

What’s next for Progress Software?

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

There are no easy answers to this key question, but one reliable metric 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.

Before that Press release, the trend of estimate revisions for Progress Software: 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 $0.89 on $129.7 million in revenue for the upcoming quarter and $3.62 on $550.7 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 – Software is currently in the bottom 39% of over 250 Zacks 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, Commvault Systems (CVLT), has not yet released its results for the quarter ended December 2021. The results are expected to be released on January 25.

This data management software company is expected to post quarterly earnings of $0.66 per share in its next report, representing a year-over-year change of +15.8%. The consensus EPS estimate for the quarter remained unchanged for the past 30 days.

Commvault Systems revenue is expected to be $195.28 million, up 3.9% from the prior year quarter.

Just Released: Zacks Top 10 Stocks for 2022

In addition to the investment ideas discussed above, would you like to know our top 10 picks for all of 2022?

From its creation in 2012 to 2021, the Zacks Top 10 Stocks portfolios gained an impressive +1,001.2% vs. +348.7% for the S&P 500. Now our research director has combed through 4,000 companies covered by the Zacks Ranking and selected the top 10 tickers to buy and keep. Don’t miss your chance to enter…because the sooner you do, the better your chances of winning.

See actions now >>

Click to get this free report

Progress Software Corporation (PRGS): Free Stock Analysis Report

CommVault Systems, Inc. (CVLT): Free Inventory Analysis Report

To read this article on Zacks.com, click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.