Yahoo Finance How to Boost Your Portfolio with Top Business Services Stocks Set to Beat Earnings
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.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive 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.
The final step today is to look at a stock that meets our ESP qualifications. Shift4 Payments (FOUR) earns a Zacks Rank #2 11 days from its next quarterly earnings release on November 7, 2022, and its Most Accurate Estimate comes in at $0.44 a share.
Shift4 Payments' Earnings ESP sits at 3.57%, which, as explained above, is calculated by taking the percentage difference between the $0.44 Most Accurate Estimate and the Zacks Consensus Estimate of $0.42.
FOUR is part of a big group of Business Services stocks that boast a positive ESP, and investors may want to take a look at FactSet Research (FDS) as well.
FactSet Research, which is readying to report earnings on December 20, 2022, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $3.60 a share, and FDS is 54 days out from its next earnings report.
The Zacks Consensus Estimate for FactSet Research is $3.58, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 0.56%.
Because both stocks hold a positive Earnings ESP, FOUR and FDS could potentially post earnings beats in their next reports.
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
Shift4 Payments, Inc. (FOUR) : Free Stock Analysis Report
FactSet Research Systems Inc. (FDS) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
