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These 2 Consumer Discretionary Stocks Could Beat Earnings: Why They Should Be on Your Radar
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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.
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.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
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.
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 Roblox?
The final step today is to look at a stock that meets our ESP qualifications. Roblox (RBLX - Free Report) earns a #1 (Strong Buy) 17 days from its next quarterly earnings release on August 1, 2024, and its Most Accurate Estimate comes in at -$0.13 a share.
RBLX has an Earnings ESP figure of +65.34%, which, as explained above, is calculated by taking the percentage difference between the -$0.13 Most Accurate Estimate and the Zacks Consensus Estimate of -$0.38. Roblox 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.
RBLX is one of just a large database of Consumer Discretionary stocks with positive ESPs. Another solid-looking stock is Comcast (CMCSA - Free Report) .
Comcast is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on July 23, 2024. CMCSA's Most Accurate Estimate sits at $1.12 a share eight days from its next earnings release.
The Zacks Consensus Estimate for Comcast is $1.11, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +0.46%.
Because both stocks hold a positive Earnings ESP, RBLX and CMCSA 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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These 2 Consumer Discretionary Stocks Could Beat Earnings: Why They Should Be on Your Radar
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.
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.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
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.
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 Roblox?
The final step today is to look at a stock that meets our ESP qualifications. Roblox (RBLX - Free Report) earns a #1 (Strong Buy) 17 days from its next quarterly earnings release on August 1, 2024, and its Most Accurate Estimate comes in at -$0.13 a share.
RBLX has an Earnings ESP figure of +65.34%, which, as explained above, is calculated by taking the percentage difference between the -$0.13 Most Accurate Estimate and the Zacks Consensus Estimate of -$0.38. Roblox 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.
RBLX is one of just a large database of Consumer Discretionary stocks with positive ESPs. Another solid-looking stock is Comcast (CMCSA - Free Report) .
Comcast is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on July 23, 2024. CMCSA's Most Accurate Estimate sits at $1.12 a share eight days from its next earnings release.
The Zacks Consensus Estimate for Comcast is $1.11, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +0.46%.
Because both stocks hold a positive Earnings ESP, RBLX and CMCSA 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 >>