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Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
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.
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. CyberArk (CYBR) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $0.82 a share five days away from its upcoming earnings release on May 13, 2025.
CYBR has an Earnings ESP figure of 3.9%, which, as explained above, is calculated by taking the percentage difference between the $0.82 Most Accurate Estimate and the Zacks Consensus Estimate of $0.79.
CYBR is part of a big group of Computer and Technology stocks that boast a positive ESP, and investors may want to take a look at ON Semiconductor Corp. (ON) as well.
Slated to report earnings on August 4, 2025, ON Semiconductor Corp. holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.54 a share 88 days from its next quarterly update.
For ON Semiconductor Corp. the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.54 is 0.7%.
CYBR and ON's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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 >>
