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.

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.

Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.

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 #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 Murphy USA?

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. Murphy USA (MUSA Quick QuoteMUSA - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $6.50 a share six days away from its upcoming earnings release on February 4, 2026.

Murphy USA's Earnings ESP sits at +0.54%, which, as explained above, is calculated by taking the percentage difference between the $6.50 Most Accurate Estimate and the Zacks Consensus Estimate of $6.46. MUSA 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.

MUSA is one of just a large database of Retail and Wholesale stocks with positive ESPs. Another solid-looking stock is Burlington Stores (BURL Quick QuoteBURL - Free Report) .

Burlington Stores, which is readying to report earnings on March 5, 2026, sits at a Zacks Rank #2 (Buy) right now. Its Most Accurate Estimate is currently $4.88 a share, and BURL is 35 days out from its next earnings report.

The Zacks Consensus Estimate for Burlington Stores is $4.71, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +3.72%.

MUSA and BURL'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 >>