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.

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.

Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.

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.

Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.

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 Magna?

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. Magna (MGA Quick QuoteMGA - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $1.59 a share 17 days away from its upcoming earnings release on July 31, 2026.

MGA has an Earnings ESP figure of +4.26%, which, as explained above, is calculated by taking the percentage difference between the $1.59 Most Accurate Estimate and the Zacks Consensus Estimate of $1.53. Magna 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.

MGA is one of just a large database of Auto, Tires and Trucks stocks with positive ESPs. Another solid-looking stock is Rivian Automotive (RIVN Quick QuoteRIVN - Free Report) .

Slated to report earnings on July 30, 2026, Rivian Automotive holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is -$0.61 a share 16 days from its next quarterly update.

The Zacks Consensus Estimate for Rivian Automotive is -$0.67, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +9.16%.

MGA and RIVN'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 >>