Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.

The earnings figure itself is key, 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 even higher.

2 Stocks to Add to Your Watchlist

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. 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.

The final step today is to look at a stock that meets our ESP qualifications. FuelCell Energy (FCEL) earns a Zacks Rank #2 13 days from its next quarterly earnings release on December 17, 2024, and its Most Accurate Estimate comes in at -$1.48 a share.

FuelCell Energy's Earnings ESP sits at 9.44%, which, as explained above, is calculated by taking the percentage difference between the -$1.48 Most Accurate Estimate and the Zacks Consensus Estimate of -$1.64.

FCEL is one of just a large database of Oils-Energy stocks with positive ESPs. Another solid-looking stock is Sunoco LP (SUN).

Sunoco LP is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on February 12, 2025. SUN's Most Accurate Estimate sits at $1.92 a share 70 days from its next earnings release.

The Zacks Consensus Estimate for Sunoco LP is $1.70, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 13.27%.

FCEL and SUN's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

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 >>

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