In This Article:
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.
The earnings figure itself is key, 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 even higher.
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.
The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. Barrick Gold (GOLD) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $0.30 a share one day away from its upcoming earnings release on May 7, 2025.
GOLD has an Earnings ESP figure of 1.59%, which, as explained above, is calculated by taking the percentage difference between the $0.30 Most Accurate Estimate and the Zacks Consensus Estimate of $0.29.
GOLD is just one of a large group of Basic Materials stocks with a positive ESP figure. Pan American Silver (PAAS) is another qualifying stock you may want to consider.
Pan American Silver, which is readying to report earnings on May 7, 2025, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently $0.20 a share, and PAAS is one day out from its next earnings report.
Pan American Silver's Earnings ESP figure currently stands at 3.95% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.19.
Because both stocks hold a positive Earnings ESP, GOLD and PAAS 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 >>