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Why Investors Need to Take Advantage of These 2 Computer and Technology Stocks Now
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Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.
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.
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.
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.
Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, 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 Arista Networks?
The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to quickly look at a qualifying stock. Arista Networks (ANET - Free Report) holds a #1 (Strong Buy) at the moment and its Most Accurate Estimate comes in at $1.78 a share 18 days away from its upcoming earnings release on May 7, 2024.
ANET has an Earnings ESP figure of +2.49%, which, as explained above, is calculated by taking the percentage difference between the $1.78 Most Accurate Estimate and the Zacks Consensus Estimate of $1.74. Arista Networks 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.
ANET is part of a big group of Computer and Technology stocks that boast a positive ESP, and investors may want to take a look at Itron (ITRI - Free Report) as well.
Itron is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on May 2, 2024. ITRI's Most Accurate Estimate sits at $0.90 a share 13 days from its next earnings release.
Itron's Earnings ESP figure currently stands at +5.88% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.85.
Because both stocks hold a positive Earnings ESP, ANET and ITRI 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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Why Investors Need to Take Advantage of These 2 Computer and Technology Stocks Now
Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.
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.
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.
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.
Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, 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 Arista Networks?
The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to quickly look at a qualifying stock. Arista Networks (ANET - Free Report) holds a #1 (Strong Buy) at the moment and its Most Accurate Estimate comes in at $1.78 a share 18 days away from its upcoming earnings release on May 7, 2024.
ANET has an Earnings ESP figure of +2.49%, which, as explained above, is calculated by taking the percentage difference between the $1.78 Most Accurate Estimate and the Zacks Consensus Estimate of $1.74. Arista Networks 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.
ANET is part of a big group of Computer and Technology stocks that boast a positive ESP, and investors may want to take a look at Itron (ITRI - Free Report) as well.
Itron is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on May 2, 2024. ITRI's Most Accurate Estimate sits at $0.90 a share 13 days from its next earnings release.
Itron's Earnings ESP figure currently stands at +5.88% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.85.
Because both stocks hold a positive Earnings ESP, ANET and ITRI 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 >>