In This Article:
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.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive 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. Exact Sciences (EXAS) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at -$0.14 a share, just one day from its upcoming earnings release on May 1, 2025.
Exact Sciences' Earnings ESP sits at 61.75%, which, as explained above, is calculated by taking the percentage difference between the -$0.14 Most Accurate Estimate and the Zacks Consensus Estimate of -$0.37.
EXAS is part of a big group of Medical stocks that boast a positive ESP, and investors may want to take a look at Novartis (NVS) as well.
Novartis is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on July 17, 2025. NVS' Most Accurate Estimate sits at $2.34 a share 78 days from its next earnings release.
Novartis' Earnings ESP figure currently stands at 4.46% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.24.
Because both stocks hold a positive Earnings ESP, EXAS and NVS could potentially post earnings beats in their next reports.
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 >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report