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.

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.

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.

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 Goldman Sachs?

The final step today is to look at a stock that meets our ESP qualifications. Goldman Sachs (GS Quick QuoteGS - Free Report) earns a #3 (Hold) 25 days from its next quarterly earnings release on October 14, 2025, and its Most Accurate Estimate comes in at $11.47 a share.

Goldman Sachs' Earnings ESP sits at +10.30%, which, as explained above, is calculated by taking the percentage difference between the $11.47 Most Accurate Estimate and the Zacks Consensus Estimate of $10.4. GS is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

GS is part of a big group of Finance stocks that boast a positive ESP, and investors may want to take a look at Royal Bank (RY Quick QuoteRY - Free Report) as well.

Royal Bank, which is readying to report earnings on December 3, 2025, sits at a Zacks Rank #3 (Hold) right now. Its Most Accurate Estimate is currently $2.54 a share, and RY is 75 days out from its next earnings report.

Royal Bank's Earnings ESP figure currently stands at +0.83% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.52.

GS and RY'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 >>