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How to Use Zacks Earnings Surprise Charts
Earnings season is starting this week as the big four banks report earnings. We’ll also hear from an airline and one of the big health insurers, among others.
Every week during earnings season, Tracey does videos that highlight the top stocks investors should be watching. Many are earnings all-stars, which means they have outstanding earnings surprise track records.
Why should you care about a company’s track record? What are all those arrows on the Zacks charts? What do they mean?
How can a Zacks 5-year earnings surprise chart help you trade during earnings season?
Tune into this video to find out.
5 Earnings Surprise Charts for Q4 Earnings Season
1. Johnson & Johnson (JNJ - Free Report)
Johnson & Johnson is the perfect example of an earnings all-star. It hasn’t missed on earnings in 5 years. That’s impressive because many companies missed when the coronavirus pandemic hit in 2020.
Johnson & Johnson beat by $0.06, or 2.4%, last quarter. It’s 4-quarter average surprise is just 1.6%. But a surprise, is still a surprise.
Shares of Johnson & Johnson are up 0.7% over the last year, which is outperforming the S&P 500, which is down 16.5% during the same time period.
Will Johnson & Johnson beat again?
2. Shopify (SHOP - Free Report)
Shopify had one of the most impressive earnings surprise streaks on the Street up until late 2021 when it finally missed on earnings.
Since that miss, it has missed twice more. Shopify has an average 4-quarter miss of 50.3% thanks to two big misses in 2022. But it beat by 74% last quarter.
Shopify shares are down 67.5% in the last year.
Will another beat be a catalyst for Shopify shares in 2023?
3. Alphabet (GOOGL - Free Report)
Alphabet is one of the big cap stocks that has never really cared if it missed or beat. From 2014 to 2016, Alphabet missed 8 quarters in a row. That’s 2 years of missing.
Yet the shares were higher over that time period, gaining 43%.
Alphabet was a big pandemic winner, and put together quite an impressive earnings record, but it has reverted back to missing again. Alphabet has missed 3 quarters in a row.
Shares are down 35.8% over the last year.
With the FAANG stocks like Alphabet, do earnings beats and miss even matter in the trade?
4. Wayfair (W - Free Report)
Wayfair was another pandemic winner, as it put together 7 earnings beats in a row in 2020 and 2021. But that track record collapsed in 2022, as Wayfair reported 3 misses in a row, and one meet.
Shares of Wayfair have plunged 78% over the last year.
Are the earnings misses a sign of further troubles to come at Wayfair?
5. Skillz Inc. (SKLZ - Free Report)
Skillz came to the public markets in 2020. It’s earnings surprise track record has been mixed during that time.
However, Skillz has beat 3 quarters in a row and beat last quarter by 28.6%.
But it hasn’t helped the stock. Shares of Skillz have sunk 89.9% during the last year, and are trading under $1.
Will the next earnings report boost Skillz shares?
[In full disclosure, Tracey owns shares of GOOGL in her personal portfolio.]