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These 2 Medical Stocks Could Beat Earnings: Why They Should Be on Your Radar
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Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
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.
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.
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 Illumina?
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. Illumina (ILMN - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.10 a share, just 28 days from its upcoming earnings release on April 23, 2024.
ILMN has an Earnings ESP figure of +252.95%, which, as explained above, is calculated by taking the percentage difference between the $0.10 Most Accurate Estimate and the Zacks Consensus Estimate of $0.03. Illumina 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.
ILMN is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is Cigna (CI - Free Report) .
Cigna is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on May 3, 2024. CI's Most Accurate Estimate sits at $6.21 a share 38 days from its next earnings release.
Cigna's Earnings ESP figure currently stands at +0.76% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $6.16.
Because both stocks hold a positive Earnings ESP, ILMN and CI 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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These 2 Medical Stocks Could Beat Earnings: Why They Should Be on Your Radar
Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
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.
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.
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 Illumina?
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. Illumina (ILMN - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.10 a share, just 28 days from its upcoming earnings release on April 23, 2024.
ILMN has an Earnings ESP figure of +252.95%, which, as explained above, is calculated by taking the percentage difference between the $0.10 Most Accurate Estimate and the Zacks Consensus Estimate of $0.03. Illumina 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.
ILMN is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is Cigna (CI - Free Report) .
Cigna is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on May 3, 2024. CI's Most Accurate Estimate sits at $6.21 a share 38 days from its next earnings release.
Cigna's Earnings ESP figure currently stands at +0.76% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $6.16.
Because both stocks hold a positive Earnings ESP, ILMN and CI 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 >>