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.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.

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, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.

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.

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 Gilead Sciences?

The final step today is to look at a stock that meets our ESP qualifications. Gilead Sciences (GILD Quick QuoteGILD - Free Report) earns a #3 (Hold) 14 days from its next quarterly earnings release on April 23, 2026, and its Most Accurate Estimate comes in at $1.94 a share.

By taking the percentage difference between the $1.94 Most Accurate Estimate and the $1.86 Zacks Consensus Estimate, Gilead Sciences has an Earnings ESP of +4.46%. Investors should also know that GILD is one of a large group 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.

GILD is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is Johnson & Johnson (JNJ Quick QuoteJNJ - Free Report) .

Johnson & Johnson, which is readying to report earnings on April 14, 2026, sits at a Zacks Rank #2 (Buy) right now. Its Most Accurate Estimate is currently $2.77 a share, and JNJ is five days out from its next earnings report.

For Johnson & Johnson, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.68 is +3.26%.

GILD and JNJ'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 >>