These 2 Retail-Wholesale Stocks Could Beat Earnings: Why They Should Be on Your Radar
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.
The earnings figure itself is key, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb even higher.
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.
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. Texas Roadhouse (TXRH) earns a Zacks Rank #2 right now and its Most Accurate Estimate sits at $1.70 a share, just 13 days from its upcoming earnings release on July 25, 2024.
By taking the percentage difference between the $1.70 Most Accurate Estimate and the $1.65 Zacks Consensus Estimate, Texas Roadhouse has an Earnings ESP of 3.34%.
TXRH is one of just a large database of Retail-Wholesale stocks with positive ESPs. Another solid-looking stock is Ulta Beauty (ULTA).
Ulta Beauty, which is readying to report earnings on August 22, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $5.56 a share, and ULTA is 41 days out from its next earnings report.
The Zacks Consensus Estimate for Ulta Beauty is $5.52, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 0.74%.
TXRH and ULTA'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 >>
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
Texas Roadhouse, Inc. (TXRH) : Free Stock Analysis Report
Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report