For Immediate Release
Chicago, IL – August 5, 2022 – Stocks in this week’s article are TakeTwo Interactive Software TTWO, Delek US Holdings DK, Ulta Beauty ULTA, Altair Engineering ALTR and Albemarle ALB.
5 Top-Ranked Stocks Likely to Beat Earnings Estimates
It is not surprising that in an earnings season, every investor looks for stocks that can beat market expectation. This is because investors always try to position themselves ahead of time and look to tap stocks that are high-quality in nature.
Our screener yields winning stocks like TakeTwo Interactive Software, Delek US Holdings, Ulta Beauty, Altair Engineering and Albemarle.
Why Is a Positive Earnings Surprise So Important?
Historically, stocks of companies with solid quarterly earnings (on a nominal basis) tank if they miss or merely meet market expectations. After all, a 20% earnings rise (though apparently looks good) doesn’t tell you if earnings growth has been exhibiting a decelerating trend.
Also, seasonal fluctuations come into play sometimes. If a company’s Q1 is seasonally weak and Q4 strong, then it is likely to report a sequential earnings decline. In such cases, growth rates are misleading while judging the true health of a company.
Meanwhile, after much brainstorming and analysis of companies’ financials and initiatives, Wall Street analysts project earnings of companies. They in fact club their insights and a company’s guidance when deriving an earnings estimate.
Thus, outperforming that estimate is almost equivalent to beating the company’s own expectation as well as the market perception. And if the margin of earnings surprise is big, it typically drives the stock higher right after the release. Thus, more than anything else, an earnings surprise can push a stock higher.
How to Find Stocks That Can Beat?
Now, finding stocks that have the potential to beat on the bottom line may be investors’ dream but not an easy job. One way to do this is to look at the earnings surprise history of the company.
An impressive track in this regard generally acts as a catalyst in sending a stock higher. It indicates the company’s ability to surpass estimates. And investors generally believe that the company will apply the same secret sauce to execute yet another earning beat in its next release.
Here are five out of 14 stocks:
TakeTwo Interactive Software: Take Two Interactive Software is a leading developer and publisher of video games. The stock carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The average earnings surprise of TTWO for the past four quarters is 19.04%.
Ulta Beauty: The Zacks Rank #2 company is a leading beauty retailer in the United States.
The average earnings surprise of ULTA for the past four quarters is 49.84%.
Albemarle: The Zacks Rank #2 premier specialty chemicals company has leading positions in attractive end markets globally.
The average earnings surprise of ALB for the past four quarters is 22.50%.
Altair Engineering: Altair Engineering Inc. is focused on the development and broad application of simulation technology to synthesize and optimize designs, processes and decisions for business performance. It has a Zacks Rank #2.
The average earnings surprise of ALTR for the past four quarters is 434.45%.
Delek US Holdings: The Zacks Rank #1 company is an independent refiner, transporter and marketer of petroleum products. The company’s operations are organized into three reportable segments: Refining, Logistics and Retail.
The average earnings surprise of DK for the past four quarters is 172.29%.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1963558/5-top-ranked-stocks-likely-to-beat-earnings-estimates
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Altair Engineering Inc. (ALTR) : Free Stock Analysis Report
TakeTwo Interactive Software, Inc. (TTWO) : Free Stock Analysis Report
Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report
Delek US Holdings, Inc. (DK) : Free Stock Analysis Report
Albemarle Corporation (ALB) : Free Stock Analysis Report
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