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 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. Etsy (ETSY) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $0.69 a share five days away from its upcoming earnings release on May 4, 2022.
Etsy’s Earnings ESP sits at 16.39%, which, as explained above, is calculated by taking the percentage difference between the $0.69 Most Accurate Estimate and the Zacks Consensus Estimate of $0.59.
ETSY is just one of a large group of Computer and Technology stocks with a positive ESP figure. Grid Dynamics (GDYN) is another qualifying stock you may want to consider.
Grid Dynamics, which is readying to report earnings on May 5, 2022, sits at a Zacks Rank #3 (Hold) right now. It’s Most Accurate Estimate is currently $0.05 a share, and GDYN is six days out from its next earnings report.
Grid Dynamics’ Earnings ESP figure currently stands at 11.11% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.05.
Because both stocks hold a positive Earnings ESP, ETSY and GDYN 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 >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Etsy, Inc. (ETSY) : Free Stock Analysis Report
Grid Dynamics Holdings, Inc. (GDYN) : Free Stock Analysis Report
To read this article on Zacks.com click here.
TTE Season 2 is now Streaming! WATCH 2023 Destinations Japan & Bhutan Episodes Free!
How To Optimize Your Blog Posts For Local Traffic
PM10 Anwar Ibrahim’s cabinet – Anthony Loke for transport, Zafrul heads MITI, Anwar finance minister