The Zacks Rank is comprised of four factors: Agreement, Magnitude, Upside and Surprise.

Agreement is the extent to which all earnings estimates are being revised in the same direction. The greater the percentage of estimates moving higher, the better the score will be for this component.

For example: if there are 10 estimate revisions for a given period, and all were up, that would be a 100% positive agreement on the direction of estimate revisions. If 7 were up and 3 were down, that would be a 70% positive agreement. If 7 were down however, with only 3 being up, that would be a 70% negative agreement of the direction of estimate revisions.

The higher the percentage of upward revisions, the better.

Factor #1: Agreement - Learn more

The Zacks Rank is comprised of four factors: Agreement, Magnitude, Upside and Surprise.

Magnitude is the size of the recent change in the current consensus estimate for the fiscal year and next fiscal year over the last 60 days.

By taking the current earnings estimate and dividing it by the estimate from 60 days ago, you can see what percentage the estimates have changed. For example: if the current estimate is $1.10 and the estimate from 60 days ago was $1.00; that would mean positive 10% increase in the estimate revision.

The larger the percentage increase in estimate revisions, the better.

Factor #2: Magnitude - Learn more

The Zacks Rank is comprised of four factors: Agreement, Magnitude, Upside and Surprise.

Upside is the percentage difference between the most accurate estimate and the consensus estimate.

By dividing the most accurate estimate (as calculated by Zacks) by the consensus estimate, you can see the difference between the two. A positive difference is obviously better than a negative one.

We've quantified the difference between the two estimates with our Earnings ESP (Expected Surprise Prediction). Simply put, stocks with a Zacks Rank of 1, 2, or 3, with a positive ESP were shown to positively surprise 70% of the time.

Factor #3: Upside - Learn more

The Zacks Rank is comprised of four factors: Agreement, Magnitude, Upside and Surprise.

The Surprise factor looks at the last few quarters of earnings surprises.

Companies with a positive earnings surprise are more likely to positively surprise in the future (or miss again if they recently missed).

For this reason, looking at a company's recent surprise history can be a great aid in forecasting the surprise likelihood of their next outing.

Factor #4: Surprise - Learn more