Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
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 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.
The final step today is to look at a stock that meets our ESP qualifications. Ulta Beauty (ULTA) earns a Zacks Rank #2 24 days from its next quarterly earnings release on August 25, 2022, and its Most Accurate Estimate comes in at $4.95 a share.
Ulta Beauty's Earnings ESP sits at 2.24%, which, as explained above, is calculated by taking the percentage difference between the $4.95 Most Accurate Estimate and the Zacks Consensus Estimate of $4.84.
ULTA is one of just a large database of Retail-Wholesale stocks with positive ESPs. Another solid-looking stock is Revolve Group (RVLV).
Revolve Group, which is readying to report earnings on August 3, 2022, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.30 a share, and RVLV is two days out from its next earnings report.
Revolve Group's Earnings ESP figure currently stands at 0.77% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.30.
ULTA and RVLV'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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Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report
Revolve Group, Inc. (RVLV) : Free Stock Analysis Report
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