How to Find Strong Computer and Technology Stocks Slated for Positive Earnings Surprises
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.
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Alphabet (GOOGL) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at $1.59 a share, just six days from its upcoming earnings release on October 24, 2023.
By taking the percentage difference between the $1.59 Most Accurate Estimate and the $1.47 Zacks Consensus Estimate, Alphabet has an Earnings ESP of 8.04%.
GOOGL 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 Wesco International (WCC) as well.
Wesco International, which is readying to report earnings on November 2, 2023, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $3.86 a share, and WCC is 15 days out from its next earnings report.
For Wesco International, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $3.85 is 0.17%.
GOOGL and WCC'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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Alphabet Inc. (GOOGL) : Free Stock Analysis Report
WESCO International, Inc. (WCC) : Free Stock Analysis Report
