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Want Better Returns? Don?t Ignore These 2 Retail and Wholesale Stocks Set to Beat Earnings
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Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
The Zacks Earnings ESP, Explained
The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.
Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank.
Should You Consider Booking Holdings?
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Booking Holdings (BKNG - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $22.27 a share, just 28 days from its upcoming earnings release on February 22, 2023.
BKNG has an Earnings ESP figure of +8.22%, which, as explained above, is calculated by taking the percentage difference between the $22.27 Most Accurate Estimate and the Zacks Consensus Estimate of $20.57. Booking Holdings is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
BKNG is just one of a large group of Retail and Wholesale stocks with a positive ESP figure. Alibaba (BABA - Free Report) is another qualifying stock you may want to consider.
Alibaba is a Zacks Rank #1 (Strong Buy) stock, and is getting ready to report earnings on February 23, 2023. BABA's Most Accurate Estimate sits at $2.32 a share 29 days from its next earnings release.
For Alibaba, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.25 is +3%.
BKNG and BABA's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
Find Stocks to Buy or Sell Before They're Reported
Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>
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Want Better Returns? Don?t Ignore These 2 Retail and Wholesale Stocks Set to Beat Earnings
Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
The Zacks Earnings ESP, Explained
The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.
Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank.
Should You Consider Booking Holdings?
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Booking Holdings (BKNG - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $22.27 a share, just 28 days from its upcoming earnings release on February 22, 2023.
BKNG has an Earnings ESP figure of +8.22%, which, as explained above, is calculated by taking the percentage difference between the $22.27 Most Accurate Estimate and the Zacks Consensus Estimate of $20.57. Booking Holdings is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
BKNG is just one of a large group of Retail and Wholesale stocks with a positive ESP figure. Alibaba (BABA - Free Report) is another qualifying stock you may want to consider.
Alibaba is a Zacks Rank #1 (Strong Buy) stock, and is getting ready to report earnings on February 23, 2023. BABA's Most Accurate Estimate sits at $2.32 a share 29 days from its next earnings release.
For Alibaba, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.25 is +3%.
BKNG and BABA's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
Find Stocks to Buy or Sell Before They're Reported
Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>