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.

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.

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 Regeneron?

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. Regeneron (REGN Quick QuoteREGN - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $8.85 a share eight days away from its upcoming earnings release on April 29, 2026.

REGN has an Earnings ESP figure of +5.87%, which, as explained above, is calculated by taking the percentage difference between the $8.85 Most Accurate Estimate and the Zacks Consensus Estimate of $8.36. Regeneron 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.

REGN is part of a big group of Medical stocks that boast a positive ESP, and investors may want to take a look at Solventum (SOLV Quick QuoteSOLV - Free Report) as well.

Solventum, which is readying to report earnings on May 5, 2026, sits at a Zacks Rank #2 (Buy) right now. Its Most Accurate Estimate is currently $1.38 a share, and SOLV is 14 days out from its next earnings report.

Solventum's Earnings ESP figure currently stands at +1.97% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.35.

REGN and SOLV'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 >>