These 2 Computer and Technology Stocks Could Beat Earnings: Why They Should Be on Your Radar

·2 min read

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.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive 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. Paypal (PYPL) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $1.21 a share two days away from its upcoming earnings release on February 9, 2023.

By taking the percentage difference between the $1.21 Most Accurate Estimate and the $1.20 Zacks Consensus Estimate, Paypal has an Earnings ESP of 0.84%.

PYPL is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Alpha and Omega Semiconductor (AOSL).

Alpha and Omega Semiconductor, which is readying to report earnings on May 4, 2023, sits at a Zacks Rank #1 (Strong Buy) right now. It's Most Accurate Estimate is currently $1.11 a share, and AOSL is 86 days out from its next earnings report.

The Zacks Consensus Estimate for Alpha and Omega Semiconductor is $0.84, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 32.14%.

PYPL and AOSL's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

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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PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report

Alpha and Omega Semiconductor Limited (AOSL) : Free Stock Analysis Report

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