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.

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 #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 Devon Energy?

The final step today is to look at a stock that meets our ESP qualifications. Devon Energy (DVN Quick QuoteDVN - Free Report) earns a #3 (Hold) 29 days from its next quarterly earnings release on May 5, 2026, and its Most Accurate Estimate comes in at $1.14 a share.

DVN has an Earnings ESP figure of +10.80%, which, as explained above, is calculated by taking the percentage difference between the $1.14 Most Accurate Estimate and the Zacks Consensus Estimate of $1.02. Devon Energy 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.

DVN is part of a big group of Oils and Energy stocks that boast a positive ESP, and investors may want to take a look at Cenovus Energy (CVE Quick QuoteCVE - Free Report) as well.

Cenovus Energy is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on May 14, 2026. CVE's Most Accurate Estimate sits at $0.43 a share 38 days from its next earnings release.

Cenovus Energy's Earnings ESP figure currently stands at +16.22% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.37.

DVN and CVE'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 >>