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These 2 Medical 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.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these 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 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.
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.
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 Merck?
The final step today is to look at a stock that meets our ESP qualifications. Merck (MRK - Free Report) earns a #3 (Hold) 12 days from its next quarterly earnings release on July 30, 2024, and its Most Accurate Estimate comes in at $2.16 a share.
MRK has an Earnings ESP figure of +0.25%, which, as explained above, is calculated by taking the percentage difference between the $2.16 Most Accurate Estimate and the Zacks Consensus Estimate of $2.15. Merck 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.
MRK is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is Iovance Biotherapeutics (IOVA - Free Report) .
Slated to report earnings on August 13, 2024, Iovance Biotherapeutics holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is -$0.33 a share 26 days from its next quarterly update.
Iovance Biotherapeutics' Earnings ESP figure currently stands at +10.12% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$0.37.
MRK and IOVA'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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These 2 Medical 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.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these 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 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.
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.
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 Merck?
The final step today is to look at a stock that meets our ESP qualifications. Merck (MRK - Free Report) earns a #3 (Hold) 12 days from its next quarterly earnings release on July 30, 2024, and its Most Accurate Estimate comes in at $2.16 a share.
MRK has an Earnings ESP figure of +0.25%, which, as explained above, is calculated by taking the percentage difference between the $2.16 Most Accurate Estimate and the Zacks Consensus Estimate of $2.15. Merck 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.
MRK is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is Iovance Biotherapeutics (IOVA - Free Report) .
Slated to report earnings on August 13, 2024, Iovance Biotherapeutics holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is -$0.33 a share 26 days from its next quarterly update.
Iovance Biotherapeutics' Earnings ESP figure currently stands at +10.12% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$0.37.
MRK and IOVA'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 >>