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.

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 Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.

The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.

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 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 Emcor Group?

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. Emcor Group (EME Quick QuoteEME - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $6.02 a share 29 days away from its upcoming earnings release on April 29, 2026.

EME has an Earnings ESP figure of +3.79%, which, as explained above, is calculated by taking the percentage difference between the $6.02 Most Accurate Estimate and the Zacks Consensus Estimate of $5.8. Emcor Group 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.

EME is one of just a large database of Construction stocks with positive ESPs. Another solid-looking stock is Johnson Controls (JCI Quick QuoteJCI - Free Report) .

Slated to report earnings on May 6, 2026, Johnson Controls holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $1.12 a share 36 days from its next quarterly update.

Johnson Controls' Earnings ESP figure currently stands at +1.33% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.11.

Because both stocks hold a positive Earnings ESP, EME and JCI 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 >>