Two factors often determine stock prices in the long run: earnings and interest rates. Investors can’t control the latter, but they can focus on a company’s earnings results every quarter.
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 last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. Roper Technologies (ROP) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $4.53 a share 25 days away from its upcoming earnings release on July 19, 2024.
Roper Technologies’ Earnings ESP sits at 1.68%, which, as explained above, is calculated by taking the percentage difference between the $4.53 Most Accurate Estimate and the Zacks Consensus Estimate of $4.46.
ROP is just one of a large group of Computer and Technology stocks with a positive ESP figure. Broadcom Inc. (AVGO) is another qualifying stock you may want to consider.
Broadcom Inc. which is readying to report earnings on August 29, 2024, sits at a Zacks Rank #3 (Hold) right now. It’s Most Accurate Estimate is currently $11.99 a share, and AVGO is 66 days out from its next earnings report.
Broadcom Inc.’s Earnings ESP figure currently stands at 0.27% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $11.96.
ROP and AVGO’s positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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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Roper Technologies, Inc. (ROP) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
