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.
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.
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. Verizon Communications (VZ) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at $1.19 a share, just 10 days from its upcoming earnings release on July 21, 2025.
VZ has an Earnings ESP figure of +0.18%, which, as explained above, is calculated by taking the percentage difference between the $1.19 Most Accurate Estimate and the Zacks Consensus Estimate of $1.18.
VZ is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is ServiceNow (NOW).
Slated to report earnings on July 23, 2025, ServiceNow holds a #2 (Buy) ranking on the Zacks Rank, and its Most Accurate Estimate is $3.61 a share 12 days from its next quarterly update.
The Zacks Consensus Estimate for ServiceNow is $3.54, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +2.11%.
VZ and NOW’s positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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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