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These 2 Computer and Technology Stocks Could Beat Earnings: Why They Should Be on Your Radar
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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.
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.
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 Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more 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 Paypal?
The final step today is to look at a stock that meets our ESP qualifications. Paypal (PYPL - Free Report) earns a #3 (Hold) one day from its next quarterly earnings release on February 7, 2024, and its Most Accurate Estimate comes in at $1.37 a share.
Paypal's Earnings ESP sits at +0.88%, which, as explained above, is calculated by taking the percentage difference between the $1.37 Most Accurate Estimate and the Zacks Consensus Estimate of $1.36. PYPL 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.
PYPL is just one of a large group of Computer and Technology stocks with a positive ESP figure. ServiceNow (NOW - Free Report) is another qualifying stock you may want to consider.
ServiceNow, which is readying to report earnings on April 24, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $3.15 a share, and NOW is 78 days out from its next earnings report.
ServiceNow's Earnings ESP figure currently stands at +0.91% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $3.13.
PYPL and NOW'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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These 2 Computer and Technology Stocks Could Beat Earnings: Why They Should Be on Your Radar
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.
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.
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 Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more 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 Paypal?
The final step today is to look at a stock that meets our ESP qualifications. Paypal (PYPL - Free Report) earns a #3 (Hold) one day from its next quarterly earnings release on February 7, 2024, and its Most Accurate Estimate comes in at $1.37 a share.
Paypal's Earnings ESP sits at +0.88%, which, as explained above, is calculated by taking the percentage difference between the $1.37 Most Accurate Estimate and the Zacks Consensus Estimate of $1.36. PYPL 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.
PYPL is just one of a large group of Computer and Technology stocks with a positive ESP figure. ServiceNow (NOW - Free Report) is another qualifying stock you may want to consider.
ServiceNow, which is readying to report earnings on April 24, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $3.15 a share, and NOW is 78 days out from its next earnings report.
ServiceNow's Earnings ESP figure currently stands at +0.91% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $3.13.
PYPL and NOW'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 >>