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.

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.

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, 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.

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 Moderna?

The final step today is to look at a stock that meets our ESP qualifications. Moderna (MRNA Quick QuoteMRNA - Free Report) earns a #3 (Hold) 28 days from its next quarterly earnings release on February 13, 2026, and its Most Accurate Estimate comes in at -$2.68 a share.

Moderna's Earnings ESP sits at +4.55%, which, as explained above, is calculated by taking the percentage difference between the -$2.68 Most Accurate Estimate and the Zacks Consensus Estimate of -$2.81. MRNA 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.

MRNA is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is Cardinal Health (CAH Quick QuoteCAH - Free Report) .

Slated to report earnings on February 5, 2026, Cardinal Health holds a #2 (Buy) ranking on the Zacks Rank, and its Most Accurate Estimate is $2.38 a share 20 days from its next quarterly update.

The Zacks Consensus Estimate for Cardinal Health is $2.33, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +2.30%.

Because both stocks hold a positive Earnings ESP, MRNA and CAH 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 >>