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.

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 Heron Therapeutics?

The final step today is to look at a stock that meets our ESP qualifications. Heron Therapeutics (HRTX Quick QuoteHRTX - Free Report) earns a #3 (Hold) 11 days from its next quarterly earnings release on May 5, 2026, and its Most Accurate Estimate comes in at -$0.02 a share.

By taking the percentage difference between the -$0.02 Most Accurate Estimate and the -$0.03 Zacks Consensus Estimate, Heron Therapeutics has an Earnings ESP of +20.00%. Investors should also know that HRTX 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.

HRTX is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is Astrazeneca (AZN Quick QuoteAZN - Free Report) .

Astrazeneca, which is readying to report earnings on April 29, 2026, sits at a Zacks Rank #3 (Hold) right now. Its Most Accurate Estimate is currently $2.58 a share, and AZN is five days out from its next earnings report.

The Zacks Consensus Estimate for Astrazeneca is $2.57, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +0.47%.

Because both stocks hold a positive Earnings ESP, HRTX and AZN 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 >>