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How to Find Strong Computer and Technology Stocks Slated for Positive Earnings Surprises
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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.
Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.
The Zacks Earnings ESP, Explained
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.
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 T-Mobile?
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. T-Mobile (TMUS - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $1.92 a share, just 30 days from its upcoming earnings release on February 7, 2024.
TMUS has an Earnings ESP figure of +0.07%, which, as explained above, is calculated by taking the percentage difference between the $1.92 Most Accurate Estimate and the Zacks Consensus Estimate of $1.91. T-Mobile is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
TMUS is just one of a large group of Computer and Technology stocks with a positive ESP figure. Generac Holdings (GNRC - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on February 21, 2024, Generac Holdings holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $2.33 a share 44 days from its next quarterly update.
For Generac Holdings, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.10 is +11.03%.
TMUS and GNRC's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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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How to Find Strong Computer and Technology Stocks Slated for Positive Earnings Surprises
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.
Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.
The Zacks Earnings ESP, Explained
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.
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 T-Mobile?
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. T-Mobile (TMUS - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $1.92 a share, just 30 days from its upcoming earnings release on February 7, 2024.
TMUS has an Earnings ESP figure of +0.07%, which, as explained above, is calculated by taking the percentage difference between the $1.92 Most Accurate Estimate and the Zacks Consensus Estimate of $1.91. T-Mobile is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
TMUS is just one of a large group of Computer and Technology stocks with a positive ESP figure. Generac Holdings (GNRC - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on February 21, 2024, Generac Holdings holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $2.33 a share 44 days from its next quarterly update.
For Generac Holdings, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.10 is +11.03%.
TMUS and GNRC's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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 >>