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Looking for Stocks with Positive Earnings Momentum? Check Out These 2 Computer and Technology Names
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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.
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, 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.
Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank.
Should You Consider The Trade Desk?
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. The Trade Desk (TTD - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.41 a share, just 30 days from its upcoming earnings release on August 14, 2024.
The Trade Desk's Earnings ESP sits at +13.54%, which, as explained above, is calculated by taking the percentage difference between the $0.41 Most Accurate Estimate and the Zacks Consensus Estimate of $0.36. TTD 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.
TTD is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Broadcom Inc. (AVGO - Free Report) .
Slated to report earnings on August 29, 2024, Broadcom Inc. holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $11.99 a share 45 days from its next quarterly update.
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.
TTD and AVGO'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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Looking for Stocks with Positive Earnings Momentum? Check Out These 2 Computer and Technology Names
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.
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, 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.
Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank.
Should You Consider The Trade Desk?
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. The Trade Desk (TTD - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.41 a share, just 30 days from its upcoming earnings release on August 14, 2024.
The Trade Desk's Earnings ESP sits at +13.54%, which, as explained above, is calculated by taking the percentage difference between the $0.41 Most Accurate Estimate and the Zacks Consensus Estimate of $0.36. TTD 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.
TTD is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Broadcom Inc. (AVGO - Free Report) .
Slated to report earnings on August 29, 2024, Broadcom Inc. holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $11.99 a share 45 days from its next quarterly update.
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.
TTD and AVGO'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 >>