Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
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.
2 Stocks to Add to Your Watchlist
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.
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. ProPetro Holding (PUMP) earns a Zacks Rank #1 right now and its Most Accurate Estimate sits at $0.41 a share, just 13 days from its upcoming earnings release on February 21, 2023.
PUMP has an Earnings ESP figure of 21.3%, which, as explained above, is calculated by taking the percentage difference between the $0.41 Most Accurate Estimate and the Zacks Consensus Estimate of $0.34.
PUMP is part of a big group of Oils-Energy stocks that boast a positive ESP, and investors may want to take a look at ConocoPhillips (COP) as well.
Slated to report earnings on May 4, 2023, ConocoPhillips holds a #3 (Hold) ranking on the Zacks Rank, and it’s Most Accurate Estimate is $2.85 a share 85 days from its next quarterly update.
ConocoPhillips’ Earnings ESP figure currently stands at 3.36% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.76.
Because both stocks hold a positive Earnings ESP, PUMP and COP 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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