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5 Must-Buy High-Flying Mid-Cap Stocks Ahead of Q1 Earnings
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We are in the first big week of this reporting cycle, with more than 1,000 companies reporting their financial numbers. Next week will be another big one with 1,600 companies set to report earnings results.
As of Apr 26, 164 companies on the S&P 500 Index have reported their quarterly financial numbers. Total earnings of these companies are down 1.2% year over year on 6.5% higher revenues. Further, 81.1% of companies have surpassed earnings estimates while 75% have surpassed revenue estimates.
Our projection has shown that total earnings of the S&P 500 Index are set to decline 6.9% year over year on 2.6% higher revenues compared with a 10% year-over-year decline in earnings on 1.7% higher revenues, estimated at the beginning of the reporting cycle. This will follow a 5.4% year-over-year decline in earnings of the S&P 500 Index on 5.9% higher revenues in fourth-quarter 2022.
Mid Caps in Q1 At a Glance
Like the three major stock indexes, the md-cap-centric S&P 400 Index ended in positive territory advancing 3.4% in first-quarter 2023. This was primarily driven by a steady decline in inflation rate, favorable economic data and a reduction in the magnitude of interest rate hikes by the Fed.
Moreover, in his March FOMC meeting statement, Fed Chairman Jerome Powell said that the rate hike cycle is approaching its end. This has strengthened the confidence of market participants in risky assets like equities.
Our Top Picks
We have narrowed our search to five mid-cap (market capital > $1 billion < $10 billion) stocks that are set to report first-quarter 2023 earnings results. These stocks have provided more than 20% returns year to date.
Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank stocks here. The combination of a favorable Zacks Rank and a possible earnings beat are likely to drive stock prices further upward.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The chart below shows the price performance of our five picks in the last quarter.
Image Source: Zacks Investment Research
Shake Shack Inc. (SHAK - Free Report) is a fast-food hamburger restaurant chain. SHAK operates in the United States and internationally. SHAK is one of the nation’s largest hamburger chains offering beef burgers, flat-top dogs, chicken sandwiches, frozen custard and crinkle cut and other food items.
The company-owned app and web channels allow customers to order food even without arriving at the restaurants. The stock price of Shake Shack has surged 30.2% year to date.
Zacks Rank #2 Shake Shack has an Earnings ESP of +2.3%. It has an expected earnings growth rate of 93.6% for the current year. The Zacks Consensus Estimate for current-year earnings improved 33.3% over the last seven days.
Shake Shack recorded earnings surprises in the last four reported quarters, with an average beat of 39.8%. SHAK is set to release earnings results on May 4, before the opening bell.
Wingstop Inc. (WING - Free Report) franchises and operates restaurants. WING’s operating segment consists of the Franchise and Company segments. WING offers classic wings, boneless wings, and tenders that are cooked-to-order, and hand-sauced-and-tossed in various flavors. The stock price of Wingstop jumped 44.6% year to date.
Zacks Rank #2 Wingstop has an Earnings ESP of +2.64%. It has an expected earnings growth rate of 3.2% for the current year. The Zacks Consensus Estimate for current-year earnings improved 10.6% over the last 30 days.
Wingstop recorded earnings surprises in three out of the last four reported quarters, with an average beat of 22.7%. WING is set to release earnings results on May 3, before the opening bell.
AssetMark Financial Holdings Inc. (AMK - Free Report) provides wealth management and technology solutions in the United States. AMK offers an open-architecture product platform, as well as client advice, asset allocation options, practice management, support services, and technology to the financial adviser channel.
AMK also provides an integrated technology platform for advisers to access a range of automated processes, including new account opening, portfolio construction, streamlined financial planning, customer billing, investor reporting, progress to goal analysis, and client activity tracking; advisory services, and a curated investment platform. The stock price of AssetMark Financial climbed 34.7% year to date.
Zacks Rank #2 AssetMark Financial has an Earnings ESP of +1.87%. It has an expected earnings growth rate of 27.1% for the current year. The Zacks Consensus Estimate for current-year earnings improved 22.7% over the last 30 days.
AssetMark Financial recorded earnings surprises in the last four reported quarters, with an average beat of 8%. AMK is set to release earnings results on May 3, after the closing bell.
Primerica Inc. (PRI - Free Report) provides financial products and services. PRI assists its clients in meeting their needs for term life insurance, which it underwrites, and mutual funds, variable annuities and other financial products, which it distributes primarily on behalf of third parties.
PRI’s mission is to serve middle-income families by helping them make informed financial decisions and providing them with a strategy and means to gain financial independence. PRI’s sales representatives use its proprietary financial needs analysis, or FNA, tool and an educational approach to demonstrate how its products can assist clients providing financial protection for their families, saving for their retirement and managing their debt.The stock price of Primerica has advanced 27.1% year to date.
Zacks Rank #1 Primerica has an Earnings ESP of +0.17%. It has an expected earnings growth rate of 32.6% for the current year. The Zacks Consensus Estimate for current-year earnings improved 2.5% over the last 30 days. Primerica is set to release earnings results on May 8, after the closing bell.
Certara Inc. (CERT - Free Report) provides software products and technology-enabled services to customers for biosimulation in drug discovery, preclinical and clinical research, regulatory submissions, and market access.
CERT offers medicines to patients using biosimulation software, technology, and services to transform drug discovery and development. CERT also provides related technology-enabled services to guide its customers' new drugs through the regulatory submission process and into the market. The stock price of Certara has soared 50.2% year to date.
Zacks Rank #1 Certara has an Earnings ESP of +5.41%. It has an expected earnings growth rate of 15.2% for the current year. The Zacks Consensus Estimate for current-year earnings improved 15.2% over the last 60 days. Certara is set to release earnings results on May 8, after the closing bell.
Image: Bigstock
5 Must-Buy High-Flying Mid-Cap Stocks Ahead of Q1 Earnings
We are in the first big week of this reporting cycle, with more than 1,000 companies reporting their financial numbers. Next week will be another big one with 1,600 companies set to report earnings results.
As of Apr 26, 164 companies on the S&P 500 Index have reported their quarterly financial numbers. Total earnings of these companies are down 1.2% year over year on 6.5% higher revenues. Further, 81.1% of companies have surpassed earnings estimates while 75% have surpassed revenue estimates.
Our projection has shown that total earnings of the S&P 500 Index are set to decline 6.9% year over year on 2.6% higher revenues compared with a 10% year-over-year decline in earnings on 1.7% higher revenues, estimated at the beginning of the reporting cycle. This will follow a 5.4% year-over-year decline in earnings of the S&P 500 Index on 5.9% higher revenues in fourth-quarter 2022.
Mid Caps in Q1 At a Glance
Like the three major stock indexes, the md-cap-centric S&P 400 Index ended in positive territory advancing 3.4% in first-quarter 2023. This was primarily driven by a steady decline in inflation rate, favorable economic data and a reduction in the magnitude of interest rate hikes by the Fed.
Moreover, in his March FOMC meeting statement, Fed Chairman Jerome Powell said that the rate hike cycle is approaching its end. This has strengthened the confidence of market participants in risky assets like equities.
Our Top Picks
We have narrowed our search to five mid-cap (market capital > $1 billion < $10 billion) stocks that are set to report first-quarter 2023 earnings results. These stocks have provided more than 20% returns year to date.
Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank stocks here. The combination of a favorable Zacks Rank and a possible earnings beat are likely to drive stock prices further upward.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The chart below shows the price performance of our five picks in the last quarter.
Image Source: Zacks Investment Research
Shake Shack Inc. (SHAK - Free Report) is a fast-food hamburger restaurant chain. SHAK operates in the United States and internationally. SHAK is one of the nation’s largest hamburger chains offering beef burgers, flat-top dogs, chicken sandwiches, frozen custard and crinkle cut and other food items.
The company-owned app and web channels allow customers to order food even without arriving at the restaurants. The stock price of Shake Shack has surged 30.2% year to date.
Zacks Rank #2 Shake Shack has an Earnings ESP of +2.3%. It has an expected earnings growth rate of 93.6% for the current year. The Zacks Consensus Estimate for current-year earnings improved 33.3% over the last seven days.
Shake Shack recorded earnings surprises in the last four reported quarters, with an average beat of 39.8%. SHAK is set to release earnings results on May 4, before the opening bell.
Wingstop Inc. (WING - Free Report) franchises and operates restaurants. WING’s operating segment consists of the Franchise and Company segments. WING offers classic wings, boneless wings, and tenders that are cooked-to-order, and hand-sauced-and-tossed in various flavors. The stock price of Wingstop jumped 44.6% year to date.
Zacks Rank #2 Wingstop has an Earnings ESP of +2.64%. It has an expected earnings growth rate of 3.2% for the current year. The Zacks Consensus Estimate for current-year earnings improved 10.6% over the last 30 days.
Wingstop recorded earnings surprises in three out of the last four reported quarters, with an average beat of 22.7%. WING is set to release earnings results on May 3, before the opening bell.
AssetMark Financial Holdings Inc. (AMK - Free Report) provides wealth management and technology solutions in the United States. AMK offers an open-architecture product platform, as well as client advice, asset allocation options, practice management, support services, and technology to the financial adviser channel.
AMK also provides an integrated technology platform for advisers to access a range of automated processes, including new account opening, portfolio construction, streamlined financial planning, customer billing, investor reporting, progress to goal analysis, and client activity tracking; advisory services, and a curated investment platform. The stock price of AssetMark Financial climbed 34.7% year to date.
Zacks Rank #2 AssetMark Financial has an Earnings ESP of +1.87%. It has an expected earnings growth rate of 27.1% for the current year. The Zacks Consensus Estimate for current-year earnings improved 22.7% over the last 30 days.
AssetMark Financial recorded earnings surprises in the last four reported quarters, with an average beat of 8%. AMK is set to release earnings results on May 3, after the closing bell.
Primerica Inc. (PRI - Free Report) provides financial products and services. PRI assists its clients in meeting their needs for term life insurance, which it underwrites, and mutual funds, variable annuities and other financial products, which it distributes primarily on behalf of third parties.
PRI’s mission is to serve middle-income families by helping them make informed financial decisions and providing them with a strategy and means to gain financial independence. PRI’s sales representatives use its proprietary financial needs analysis, or FNA, tool and an educational approach to demonstrate how its products can assist clients providing financial protection for their families, saving for their retirement and managing their debt.The stock price of Primerica has advanced 27.1% year to date.
Zacks Rank #1 Primerica has an Earnings ESP of +0.17%. It has an expected earnings growth rate of 32.6% for the current year. The Zacks Consensus Estimate for current-year earnings improved 2.5% over the last 30 days. Primerica is set to release earnings results on May 8, after the closing bell.
Certara Inc. (CERT - Free Report) provides software products and technology-enabled services to customers for biosimulation in drug discovery, preclinical and clinical research, regulatory submissions, and market access.
CERT offers medicines to patients using biosimulation software, technology, and services to transform drug discovery and development. CERT also provides related technology-enabled services to guide its customers' new drugs through the regulatory submission process and into the market. The stock price of Certara has soared 50.2% year to date.
Zacks Rank #1 Certara has an Earnings ESP of +5.41%. It has an expected earnings growth rate of 15.2% for the current year. The Zacks Consensus Estimate for current-year earnings improved 15.2% over the last 60 days. Certara is set to release earnings results on May 8, after the closing bell.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.