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.

We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.

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 Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more 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 HF Sinclair?

The final step today is to look at a stock that meets our ESP qualifications. HF Sinclair (DINO Quick QuoteDINO - Free Report) earns a #1 (Strong Buy) 30 days from its next quarterly earnings release on October 28, 2026, and its Most Accurate Estimate comes in at $7.76 a share.

By taking the percentage difference between the $7.76 Most Accurate Estimate and the $7.12 Zacks Consensus Estimate, HF Sinclair has an Earnings ESP of +9.07%. Investors should also know that DINO 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.

DINO is just one of a large group of Oils and Energy stocks with a positive ESP figure. Nextpower (NXT Quick QuoteNXT - Free Report) is another qualifying stock you may want to consider.

Slated to report earnings on October 22, 2026, Nextpower holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $1.15 a share 24 days from its next quarterly update.

The Zacks Consensus Estimate for Nextpower is $1.11, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +3.23%.

DINO and NXT'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 >>