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.

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, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.

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.

In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 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 Pan American Silver?

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. Pan American Silver (PAAS Quick QuotePAAS - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $0.53 a share 23 days away from its upcoming earnings release on November 12, 2025.

PAAS has an Earnings ESP figure of +2.27%, which, as explained above, is calculated by taking the percentage difference between the $0.53 Most Accurate Estimate and the Zacks Consensus Estimate of $0.51. Pan American Silver 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.

PAAS is part of a big group of Basic Materials stocks that boast a positive ESP, and investors may want to take a look at Agnico Eagle Mines (AEM Quick QuoteAEM - Free Report) as well.

Slated to report earnings on October 29, 2025, Agnico Eagle Mines holds a #2 (Buy) ranking on the Zacks Rank, and its Most Accurate Estimate is $1.95 a share nine days from its next quarterly update.

The Zacks Consensus Estimate for Agnico Eagle Mines is $1.68, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +16.07%.

PAAS and AEM's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

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 >>