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Want Better Returns? Don?t Ignore These 2 Computer and Technology Stocks Set to Beat Earnings
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Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.
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 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 core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% 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 Autodesk?
The final step today is to look at a stock that meets our ESP qualifications. Autodesk (ADSK - Free Report) earns a #2 (Buy) one day from its next quarterly earnings release on June 6, 2024, and its Most Accurate Estimate comes in at $1.87 a share.
Autodesk's Earnings ESP sits at +5.25%, which, as explained above, is calculated by taking the percentage difference between the $1.87 Most Accurate Estimate and the Zacks Consensus Estimate of $1.78. ADSK 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.
ADSK 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 Monolithic Power (MPWR - Free Report) as well.
Monolithic Power is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on July 29, 2024. MPWR's Most Accurate Estimate sits at $3.06 a share 54 days from its next earnings release.
The Zacks Consensus Estimate for Monolithic Power is $2.99, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +2.39%.
ADSK and MPWR'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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Want Better Returns? Don?t Ignore These 2 Computer and Technology Stocks Set to Beat Earnings
Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.
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 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 core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% 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 Autodesk?
The final step today is to look at a stock that meets our ESP qualifications. Autodesk (ADSK - Free Report) earns a #2 (Buy) one day from its next quarterly earnings release on June 6, 2024, and its Most Accurate Estimate comes in at $1.87 a share.
Autodesk's Earnings ESP sits at +5.25%, which, as explained above, is calculated by taking the percentage difference between the $1.87 Most Accurate Estimate and the Zacks Consensus Estimate of $1.78. ADSK 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.
ADSK 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 Monolithic Power (MPWR - Free Report) as well.
Monolithic Power is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on July 29, 2024. MPWR's Most Accurate Estimate sits at $3.06 a share 54 days from its next earnings release.
The Zacks Consensus Estimate for Monolithic Power is $2.99, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +2.39%.
ADSK and MPWR'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 >>