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These 2 Construction Stocks Could Beat Earnings: Why They Should Be on Your Radar

Zacks Equity Research
·2 min read

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.

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 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.

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The final step today is to look at a stock that meets our ESP qualifications. Vulcan Materials (VMC) earns a Zacks Rank #3 one day from its next quarterly earnings release on May 2, 2024, and its Most Accurate Estimate comes in at $0.79 a share.

Vulcan Materials' Earnings ESP sits at 3%, which, as explained above, is calculated by taking the percentage difference between the $0.79 Most Accurate Estimate and the Zacks Consensus Estimate of $0.76.

VMC is just one of a large group of Construction stocks with a positive ESP figure. Dream Finders Homes Inc. (DFH) is another qualifying stock you may want to consider.

Slated to report earnings on May 2, 2024, Dream Finders Homes Inc. holds a #1 (Strong Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.75 a share one day from its next quarterly update.

Dream Finders Homes Inc.'s Earnings ESP figure currently stands at 7.14% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.70.

VMC and DFH'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

Vulcan Materials Company (VMC) : Free Stock Analysis Report

Dream Finders Homes, Inc. (DFH) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research