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Mitek Systems, Inc . MITK is expected to release first-quarter fiscal 2019 results on Jan 24.

Notably, the company beat the Zacks Consensus Estimate in the trailing four quarters, recording an average positive surprise of 51.4%.

In the fourth quarter of fiscal 2018, the company delivered non-GAAP earnings of 14 cents per share, surpassing the Zacks Consensus Estimate by a nickel.

Further, revenues increased 63% from the year-ago quarter to $21 million, beating the Zacks Consensus Estimate of $20 million.

What to Expect

For first-quarter fiscal 2019, management anticipates revenues in the range of $17-$17.5 million. The corresponding Zacks Consensus Estimate is pegged at $17.3 million, representing an increase of approximately 42.2% from the year-ago quarter.

The Zacks Consensus Estimate for earnings has been stable ahead of first-quarter 2019 results and is currently pegged at 4 cents, representing year-over-year growth of 33.3%.

Let's see how things are shaping up prior to this announcement.

Factors Expected to Influence Q1 Earnings

Mitek Systems is primarily engaged in providing mobile identity verification, mobile check deposit, prefill documentation and mobile capture solutions. The solutions enable companies to validate user's identity to accelerate digital verification processes for financial transactions or other applications.

The rapid adoption of identity verification solutions is anticipated to favor company's first-quarter 2019 results. In the previously reported quarter, ID business surged 79% from the year-ago quarter primarily due to growing clout of Mobile Verify solution.

Strength in the company's artificial intelligence (AI) and machine learning (ML) capabilities to offer streamlined and secure mobile commerce platform bodes well. In fact, synergies from Mitek Systems' A2iA (Artificial Intelligence and Image Analysis) buyout are anticipated to strengthen Mobile Deposit offering.

Notably, the latest Mobile Deposit 4.7 version is integrated with A2iA's handwriting recognition technology and optical character recognition capabilities. The incremental adoption of the new version is likely to act as a tailwind in the to-be-reported quarter.

In fact, Mitek Systems' automated check capture technology, MiSnap and Mobile Deposit offering, recently enabled Boundless Fundraising mobile-based application platform for Charity Dynamics.

Notably, favorable trends of digital transformation and increasing regulations owing to data breaches are expected to bolster adoption of Mitek Systems' solutions. The company's expanding customer base including the likes of PayPal PYPL , American Express AXP , Money Gram, ANNA Money, to mention a few, is a positive.

However, increasing operating expenses and costs pertaining to acquisitions in a bid to maintain competitive position in the ID verification market are likely to limit margin expansion.

What Zacks Model Unveils

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP . Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Mitek Systems, Inc. Price and EPS Surprise

Mitek Systems, Inc. Price and EPS Surprise | Mitek Systems, Inc. Quote

Mitek Systems has a Zacks Rank #2 and an Earnings ESP of 0.00%, which makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Stock That Warrants a Look

Here is a company, which, per our model, has the right combination of elements to post an earnings beat:

Brown & Brown, Inc. BRO has an Earnings ESP of +5.38% and a Zacks Rank #1. The company is slated to report fourth-quarter 2018 earnings on Jan 28. You can see the complete list of today's Zacks #1 Rank stocks here .

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

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