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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.
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 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. Centene (CNC) earns a Zacks Rank #3 14 days from its next quarterly earnings release on April 25, 2025, and its Most Accurate Estimate comes in at $2.45 a share.
By taking the percentage difference between the $2.45 Most Accurate Estimate and the $2.32 Zacks Consensus Estimate, Centene has an Earnings ESP of 5.46%.
CNC is just one of a large group of Medical stocks with a positive ESP figure. Agilent Technologies (A) is another qualifying stock you may want to consider.
Agilent Technologies, which is readying to report earnings on June 4, 2025, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $1.29 a share, and An is 54 days out from its next earnings report.
The Zacks Consensus Estimate for Agilent Technologies is $1.27, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 1.07%.
Because both stocks hold a positive Earnings ESP, CNC and A 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 >>
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