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Zacks.com featured highlights include: Crocs, IAC/InterActive, Fortinet, Tandem Diabetes and Cross Country

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For Immediate Release

Chicago, IL – August 7, 2019 - Stocks in this week’s article are Crocs Inc. (CROX - Free Report) , IAC/InterActiveCorp (IAC - Free Report) , Fortinet Inc. (FTNT - Free Report) , Tandem Diabetes Care Inc. (TNDM - Free Report) and Cross Country Healthcare Inc. (CCRN - Free Report) .

5 Top-Ranked Stocks Primed for an Earnings Beat

All the uncertainty that hovers prior to the earnings release of a company stems from speculation over its beat potential. More than the comparison with previous results, it is a positive earnings surprise which drives the market post release. And since in any earnings season, both positive and negative surprises hit us, investors must always be looking keenly for stocks likely to post positive surprises or an earnings beat.

Why Is Earnings Surprise So Important?

Historically, stocks of companies with solid quarterly earnings (on a nominal basis) fall if they miss or just come in line with market expectations. After all, a 20% earnings rise (though it looks good apparently) doesn’t tell you if earnings growth has been exhibiting a decelerating trend. If that is the case, the company’s fundamentals are in serious question.

There is also the factor of seasonal fluctuation. If a company’s Q1 is seasonally weak and Q4 is strong, then it is likely to report a sequential earnings decline. In such a case, growth rates are ambiguous while judging the company’s true health.

On the other hand, Wall Street analysts study companies’ financials and initiatives to forecast earnings. They in fact club their insights and the company’s guidance to derive an earnings estimate. So, outperforming that estimate is almost equivalent to beating the company’s own expectation as well as market perception. And if the company manages to surpass earnings by a wide margin, it typically drives the stock higher right after the release.

Now, since it is hard to predict if a company will beat or miss in the upcoming earnings season, investors can check its earnings surprise history. A notable track record generally acts as a tailwind. It revs up chances of beating estimates in the next release too as investors expect the company to use the same old trick to come ahead of expectations, or is smart enough to pull off a beat in the next release.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/459535/5-topranked-stocks-primed-for-an-earnings-beat?art_rec=quote-stock_overview-zacks_news-ID04-txt-459535

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

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Strong Stocks that Should Be in the News

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