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These 2 Medical 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.
The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.
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 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.
The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
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 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 Sanofi?
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. Sanofi (SNY - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $1.06 a share, just eight days from its upcoming earnings release on February 1, 2024.
By taking the percentage difference between the $1.06 Most Accurate Estimate and the $0.94 Zacks Consensus Estimate, Sanofi has an Earnings ESP of +13.01%. Investors should also know that SNY 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.
SNY is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is Adma Biologics (ADMA - Free Report) .
Slated to report earnings on March 28, 2024, Adma Biologics holds a #1 (Strong Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.03 a share 64 days from its next quarterly update.
For Adma Biologics, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.02 is +50%.
SNY and ADMA'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 Medical 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.
The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.
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 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.
The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
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 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 Sanofi?
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. Sanofi (SNY - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $1.06 a share, just eight days from its upcoming earnings release on February 1, 2024.
By taking the percentage difference between the $1.06 Most Accurate Estimate and the $0.94 Zacks Consensus Estimate, Sanofi has an Earnings ESP of +13.01%. Investors should also know that SNY 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.
SNY is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is Adma Biologics (ADMA - Free Report) .
Slated to report earnings on March 28, 2024, Adma Biologics holds a #1 (Strong Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.03 a share 64 days from its next quarterly update.
For Adma Biologics, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.02 is +50%.
SNY and ADMA'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 >>