Investors watch earnings releases keenly, as changes in a company’s performance can be a good indication whether a company is on the right track, or headed the wrong way.

Nuance Communications, Inc. (NUAN) is scheduled to release its earnings results Monday. The company currently has an earnings per share ratio (EPS trailing twelve months) of .02 and investors are hoping to see that number grow. Let’s take a look at the performance of the stock since its previous earnings release.

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In the past three months, the stock has posted a 12.45% gain in terms of stock price. Over the same period, the Application Software industry group has returned a combined 16.31% gain.

So the eyes of investors turn to this new round of earnings.

Now, good earnings don’t always lead to higher stock prices, but keeping up on earnings is still a vital part of your fundamental stock analysis. Also note that companies often change earnings dates, so you should double-check them often.

When looking at earnings, it’s very helpful to see how stocks compare to others in its industry group. And even though two stocks may not be direct competitors, many analysts and institutional investors still compare them and evaluate them relative to other stocks in their group.  

NUAN is in the Application Software industry group where it competes for investor dollars with companies like Sybase, Inc. (SY), which released its earnings on 10/27 and last reported a 19.09% gain in quarter-over-quarter EPS.

Another industry peer, VeriSign Inc. (VRSN) released its earnings on 11/05 and last reported a 15.51% gain in QOQ EPS.

Microsoft Corporation (MSFT) is the stock with the biggest market cap in the Application Software industry at $267.35B. It closed yesterday at $30.11

To better understand how to evaluate earnings announcements and the affect they have on your portfolio, be sure to read Earnings Announcements and EPS.

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