How to Find Strong Retail-Wholesale Stocks Slated for Positive Earnings Surprises
Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.
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, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate. The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction.
The final step today is to look at a stock that meets our ESP qualifications. Domino's Pizza (DPZ) earns a Zacks Rank #3 30 days from its next quarterly earnings release on April 25, 2024, and its Most Accurate Estimate comes in at $3.47 a share.
DPZ has an Earnings ESP figure of 0.16%, which, as explained above, is calculated by taking the percentage difference between the $3.47 Most Accurate Estimate and the Zacks Consensus Estimate of $3.46.
DPZ is one of just a large database of Retail-Wholesale stocks with positive ESPs. Another solid-looking stock is MercadoLibre (MELI).
MercadoLibre, which is readying to report earnings on May 1, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $8.48 a share, and MELI is 36 days out from its next earnings report.
The Zacks Consensus Estimate for MercadoLibre is $7.44, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 14.03%.
Because both stocks hold a positive Earnings ESP, DPZ and MELI 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 >>
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Domino's Pizza Inc (DPZ) : Free Stock Analysis Report
MercadoLibre, Inc. (MELI) : Free Stock Analysis Report
