Yahoo Finance How to Find Strong Computer and Technology Stocks Slated for Positive Earnings Surprises
Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.
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 Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks 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. Applied Materials (AMAT) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $1.99 a share one day away from its upcoming earnings release on May 16, 2024.
Applied Materials' Earnings ESP sits at 0.89%, which, as explained above, is calculated by taking the percentage difference between the $1.99 Most Accurate Estimate and the Zacks Consensus Estimate of $1.97.
AMAT is just one of a large group of Computer and Technology stocks with a positive ESP figure. Western Digital (WDC) is another qualifying stock you may want to consider.
Western Digital, which is readying to report earnings on July 29, 2024, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently $1.15 a share, and WDC is 75 days out from its next earnings report.
The Zacks Consensus Estimate for Western Digital is $1.02, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 12.7%.
AMAT and WDC'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 >>
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Applied Materials, Inc. (AMAT) : Free Stock Analysis Report
Western Digital Corporation (WDC) : Free Stock Analysis Report
