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Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.
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.
2 Stocks to Add to Your Watchlist
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.
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Oshkosh (OSK) earns a Zacks Rank #2 right now and its Most Accurate Estimate sits at $2.19 a share, just 20 days from its upcoming earnings release on January 30, 2024.
By taking the percentage difference between the $2.19 Most Accurate Estimate and the $2.17 Zacks Consensus Estimate, Oshkosh has an Earnings ESP of 0.93%.
OSK is just one of a large group of Auto-Tires-Trucks stocks with a positive ESP figure. Commercial Vehicle Group (CVGI) is another qualifying stock you may want to consider.
Commercial Vehicle Group is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on March 4, 2024. CVGI's Most Accurate Estimate sits at $0.15 a share 54 days from its next earnings release.
The Zacks Consensus Estimate for Commercial Vehicle Group is $0.15, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 2.27%.
OSK and CVGI'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 >>