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Want Better Returns? Don?t Ignore These 2 Computer and Technology Stocks Set to Beat Earnings
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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.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
The Zacks Earnings ESP, Explained
The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
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. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.
Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.
Should You Consider Snap?
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. Snap (SNAP - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0 a share, just 12 days from its upcoming earnings release on July 25, 2023.
Snap's Earnings ESP sits at +100%, which, as explained above, is calculated by taking the percentage difference between the $0 Most Accurate Estimate and the Zacks Consensus Estimate of -$0.04. SNAP is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
SNAP is part of a big group of Computer and Technology stocks that boast a positive ESP, and investors may want to take a look at Paycom Software (PAYC - Free Report) as well.
Slated to report earnings on August 1, 2023, Paycom Software holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.63 a share 19 days from its next quarterly update.
For Paycom Software, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.60 is +1.88%.
Because both stocks hold a positive Earnings ESP, SNAP and PAYC 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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Want Better Returns? Don?t Ignore These 2 Computer and Technology Stocks Set to Beat Earnings
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.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
The Zacks Earnings ESP, Explained
The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
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. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.
Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.
Should You Consider Snap?
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. Snap (SNAP - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0 a share, just 12 days from its upcoming earnings release on July 25, 2023.
Snap's Earnings ESP sits at +100%, which, as explained above, is calculated by taking the percentage difference between the $0 Most Accurate Estimate and the Zacks Consensus Estimate of -$0.04. SNAP is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
SNAP is part of a big group of Computer and Technology stocks that boast a positive ESP, and investors may want to take a look at Paycom Software (PAYC - Free Report) as well.
Slated to report earnings on August 1, 2023, Paycom Software holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.63 a share 19 days from its next quarterly update.
For Paycom Software, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.60 is +1.88%.
Because both stocks hold a positive Earnings ESP, SNAP and PAYC 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 >>