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.

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 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.

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 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 Novo Nordisk?

The final step today is to look at a stock that meets our ESP qualifications. Novo Nordisk (NVO Quick QuoteNVO - Free Report) earns a #3 (Hold) 30 days from its next quarterly earnings release on May 6, 2026, and its Most Accurate Estimate comes in at $0.90 a share.

NVO has an Earnings ESP figure of +3.35%, which, as explained above, is calculated by taking the percentage difference between the $0.90 Most Accurate Estimate and the Zacks Consensus Estimate of $0.87. Novo Nordisk 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.

NVO is part of a big group of Medical stocks that boast a positive ESP, and investors may want to take a look at Tenet Healthcare (THC Quick QuoteTHC - Free Report) as well.

Tenet Healthcare, which is readying to report earnings on April 30, 2026, sits at a Zacks Rank #3 (Hold) right now. Its Most Accurate Estimate is currently $4.21 a share, and THC is 24 days out from its next earnings report.

For Tenet Healthcare, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $4.19 is +0.44%.

NVO and THC'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 >>