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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.
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 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. Check Point Software (CHKP) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at $1.65 a share, just 28 days from its upcoming earnings release on July 25, 2022.
CHKP has an Earnings ESP figure of 2.37%, which, as explained above, is calculated by taking the percentage difference between the $1.65 Most Accurate Estimate and the Zacks Consensus Estimate of $1.61.
CHKP is just one of a large group of Computer and Technology stocks with a positive ESP figure. Intel (INTC) is another qualifying stock you may want to consider.
Intel is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on July 28, 2022. INTC's Most Accurate Estimate sits at $0.90 a share 31 days from its next earnings release.
For Intel, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.75 is 19.73%.
CHKP and INTC'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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Check Point Software Technologies Ltd. (CHKP) : Free Stock Analysis Report
Intel Corporation (INTC) : Free Stock Analysis Report
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