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These 2 Retail and Wholesale Stocks Could Beat Earnings: Why They Should Be on Your Radar
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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.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
The Zacks Earnings ESP, Explained
The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.
Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.
Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.
Should You Consider Ulta Beauty?
The final step today is to look at a stock that meets our ESP qualifications. Ulta Beauty (ULTA - Free Report) earns a #3 (Hold) 30 days from its next quarterly earnings release on December 7, 2023, and its Most Accurate Estimate comes in at $5.09 a share.
By taking the percentage difference between the $5.09 Most Accurate Estimate and the $4.98 Zacks Consensus Estimate, Ulta Beauty has an Earnings ESP of +2.19%. Investors should also know that ULTA is one of a large group 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.
ULTA is one of just a large database of Retail and Wholesale stocks with positive ESPs. Another solid-looking stock is Fastenal (FAST - Free Report) .
Slated to report earnings on January 18, 2024, Fastenal holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.45 a share 72 days from its next quarterly update.
Fastenal's Earnings ESP figure currently stands at +0.1% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.45.
ULTA and FAST's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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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These 2 Retail and Wholesale Stocks Could Beat Earnings: Why They Should Be on Your Radar
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.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
The Zacks Earnings ESP, Explained
The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.
Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.
Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.
Should You Consider Ulta Beauty?
The final step today is to look at a stock that meets our ESP qualifications. Ulta Beauty (ULTA - Free Report) earns a #3 (Hold) 30 days from its next quarterly earnings release on December 7, 2023, and its Most Accurate Estimate comes in at $5.09 a share.
By taking the percentage difference between the $5.09 Most Accurate Estimate and the $4.98 Zacks Consensus Estimate, Ulta Beauty has an Earnings ESP of +2.19%. Investors should also know that ULTA is one of a large group 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.
ULTA is one of just a large database of Retail and Wholesale stocks with positive ESPs. Another solid-looking stock is Fastenal (FAST - Free Report) .
Slated to report earnings on January 18, 2024, Fastenal holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.45 a share 72 days from its next quarterly update.
Fastenal's Earnings ESP figure currently stands at +0.1% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.45.
ULTA and FAST's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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 >>