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Zacks.com featured highlights include: Zumiez, Funko, Frontdoor, CyberArk and Universal Display

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Chicago, IL – September 10, 2019 - Stocks in this week’s article are Zumiez Inc. (ZUMZ - Free Report) , Funko, Inc. (FNKO - Free Report) , Frontdoor Inc. (FTDR - Free Report) , CyberArk Software Ltd. (CYBR - Free Report) and Universal Display Corp. (OLED - Free Report) .

Make the Most of Earnings Beats with These 5 Stocks

Picking up estimate-beating stocks is any investor’s dream. After all, this is the time when investors get to know which stock to settle on and which ones to walk out on, based on a company’s earnings scorecard. 

While appraising earnings performance, there are various factors investors normally take a look at. But among them, earnings beat seems to be the most intriguing driver of stock movement other than factors like earnings growth or acceleration.

Inside Earnings Beat

Investors normally look to position themselves ahead of time and hunt for stocks that are likely to spring up an astounding performance. After much brainstorming, Wall Street analysts project earnings of companies. These estimates act as investment leads.

A positive earnings surprise or earnings beat is typically the case when actual or reported earnings come in above the consensus estimate. Historically, if a company’s earnings manage to beat market expectations, its stock surges post release.

What Makes Earnings Beat Superior to Earnings Growth

A 20% earnings rise (though apparently looks good) doesn’t tell you everything about the company’s performance. This might represent a decelerating earnings growth momentum over the years or quarters, raising questions over the company’s fundamentals.

Also, seasonal fluctuations come into the play. If a company’s Q1 is seasonally weak and Q4 is strong, then it is likely to report a sequential earnings decline. In such cases, growth rates are misleading while judging the true health of a company.

On the other hand, analysts combine their understanding and a company’s guidance when formulating an earnings estimate. Thus, outperforming that estimate is almost equivalent to beating the company’s own expectation as well as market perception. Of course, this gives you a clear picture of the company’s bottom line.

How to Find Those Star Performers?

Now, since it is tough to foresee if a company will beat or miss in the upcoming earnings release, investors can review the earnings surprise history. An impressive track in this regard generally acts as a catalyst in sending a stock higher. It indicates the company’s ability to surpass estimates. And investors generally believe that the company will have the same trick up its sleeve or in other words is smart enough to beat on earnings next time.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/509054/looking-to-make-the-most-of-earnings-beat-5-top-picks

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.

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine.  But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.

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