Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.

We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.

Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.

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.

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 Casey's General Stores?

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. Casey's General Stores (CASY Quick QuoteCASY - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $2.03 a share, just 29 days from its upcoming earnings release on June 10, 2025.

CASY has an Earnings ESP figure of +5.05%, which, as explained above, is calculated by taking the percentage difference between the $2.03 Most Accurate Estimate and the Zacks Consensus Estimate of $1.93. Casey's General Stores 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.

CASY is part of a big group of Retail and Wholesale stocks that boast a positive ESP, and investors may want to take a look at Signet (SIG Quick QuoteSIG - Free Report) as well.

Signet is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on June 3, 2025. SIG's Most Accurate Estimate sits at $1.05 a share 22 days from its next earnings release.

For Signet, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.02 is +2.94%.

Because both stocks hold a positive Earnings ESP, CASY and SIG 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 >>