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.

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.

Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 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 Nike?

Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Nike (NKE Quick QuoteNKE - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.31 a share, just five days from its upcoming earnings release on March 31, 2026.

Nike's Earnings ESP sits at +5.26%, which, as explained above, is calculated by taking the percentage difference between the $0.31 Most Accurate Estimate and the Zacks Consensus Estimate of $0.29. NKE 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.

NKE is just one of a large group of Consumer Discretionary stocks with a positive ESP figure. Caesars Entertainment (CZR Quick QuoteCZR - Free Report) is another qualifying stock you may want to consider.

Slated to report earnings on May 5, 2026, Caesars Entertainment holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is -$0.18 a share 40 days from its next quarterly update.

Caesars Entertainment's Earnings ESP figure currently stands at +4.59% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$0.19.

NKE and CZR'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 >>