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.

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.

When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% 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 GE Vernova?

The final step today is to look at a stock that meets our ESP qualifications. GE Vernova (GEV Quick QuoteGEV - Free Report) earns a #3 (Hold) 30 days from its next quarterly earnings release on July 23, 2025, and its Most Accurate Estimate comes in at $2.06 a share.

GEV has an Earnings ESP figure of +26.72%, which, as explained above, is calculated by taking the percentage difference between the $2.06 Most Accurate Estimate and the Zacks Consensus Estimate of $1.63. GE Vernova 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.

GEV is one of just a large database of Oils and Energy stocks with positive ESPs. Another solid-looking stock is Occidental Petroleum (OXY Quick QuoteOXY - Free Report) .

Occidental Petroleum, which is readying to report earnings on August 6, 2025, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.45 a share, and OXY is 44 days out from its next earnings report.

Occidental Petroleum's Earnings ESP figure currently stands at +18.67% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.38.

GEV and OXY's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

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 >>