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Looking for Stocks with Positive Earnings Momentum? Check Out These 2 Industrial Products Names
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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.
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.
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.
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.
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 Axon Enterprise?
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. Axon Enterprise (AXON - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $1.03 a share 22 days away from its upcoming earnings release on May 14, 2024.
AXON has an Earnings ESP figure of +5.97%, which, as explained above, is calculated by taking the percentage difference between the $1.03 Most Accurate Estimate and the Zacks Consensus Estimate of $0.97. Axon Enterprise 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.
AXON is just one of a large group of Industrial Products stocks with a positive ESP figure. Applied Industrial Technologies (AIT - Free Report) is another qualifying stock you may want to consider.
Applied Industrial Technologies is a Zacks Rank #1 (Strong Buy) stock, and is getting ready to report earnings on April 25, 2024. AIT's Most Accurate Estimate sits at $2.41 a share three days from its next earnings release.
The Zacks Consensus Estimate for Applied Industrial Technologies is $2.40, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +0.63%.
Because both stocks hold a positive Earnings ESP, AXON and AIT 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 Industrial Products Names
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.
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.
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.
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.
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 Axon Enterprise?
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. Axon Enterprise (AXON - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $1.03 a share 22 days away from its upcoming earnings release on May 14, 2024.
AXON has an Earnings ESP figure of +5.97%, which, as explained above, is calculated by taking the percentage difference between the $1.03 Most Accurate Estimate and the Zacks Consensus Estimate of $0.97. Axon Enterprise 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.
AXON is just one of a large group of Industrial Products stocks with a positive ESP figure. Applied Industrial Technologies (AIT - Free Report) is another qualifying stock you may want to consider.
Applied Industrial Technologies is a Zacks Rank #1 (Strong Buy) stock, and is getting ready to report earnings on April 25, 2024. AIT's Most Accurate Estimate sits at $2.41 a share three days from its next earnings release.
The Zacks Consensus Estimate for Applied Industrial Technologies is $2.40, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +0.63%.
Because both stocks hold a positive Earnings ESP, AXON and AIT 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 >>