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Looking for Stocks with Positive Earnings Momentum? Check Out These 2 Computer and Technology Names
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Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.
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 is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.
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.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% annual returns on average, according to our 10 year backtest.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), 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 Autodesk?
The final step today is to look at a stock that meets our ESP qualifications. Autodesk (ADSK - Free Report) earns a #3 (Hold) 20 days from its next quarterly earnings release on May 25, 2023, and its Most Accurate Estimate comes in at $1.58 a share.
ADSK has an Earnings ESP figure of +1.76%, which, as explained above, is calculated by taking the percentage difference between the $1.58 Most Accurate Estimate and the Zacks Consensus Estimate of $1.55. Autodesk 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.
ADSK is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Cisco Systems (CSCO - Free Report) .
Cisco Systems is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on May 17, 2023. CSCO's Most Accurate Estimate sits at $0.99 a share 12 days from its next earnings release.
Cisco Systems' Earnings ESP figure currently stands at +1.59% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.97.
Because both stocks hold a positive Earnings ESP, ADSK and CSCO could potentially post earnings beats in their next reports.
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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Looking for Stocks with Positive Earnings Momentum? Check Out These 2 Computer and Technology Names
Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.
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 is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.
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.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% annual returns on average, according to our 10 year backtest.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), 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 Autodesk?
The final step today is to look at a stock that meets our ESP qualifications. Autodesk (ADSK - Free Report) earns a #3 (Hold) 20 days from its next quarterly earnings release on May 25, 2023, and its Most Accurate Estimate comes in at $1.58 a share.
ADSK has an Earnings ESP figure of +1.76%, which, as explained above, is calculated by taking the percentage difference between the $1.58 Most Accurate Estimate and the Zacks Consensus Estimate of $1.55. Autodesk 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.
ADSK is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Cisco Systems (CSCO - Free Report) .
Cisco Systems is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on May 17, 2023. CSCO's Most Accurate Estimate sits at $0.99 a share 12 days from its next earnings release.
Cisco Systems' Earnings ESP figure currently stands at +1.59% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.97.
Because both stocks hold a positive Earnings ESP, ADSK and CSCO could potentially post earnings beats in their next reports.
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 >>