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How to Find Strong Computer and Technology Stocks Slated for Positive Earnings Surprises

Zacks Equity Research
·2 min read

Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.

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.

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The final step today is to look at a stock that meets our ESP qualifications. CDW (CDW) earns a Zacks Rank #3 13 days from its next quarterly earnings release on November 2, 2022, and its Most Accurate Estimate comes in at $2.53 a share.

CDW has an Earnings ESP figure of 0.31%, which, as explained above, is calculated by taking the percentage difference between the $2.53 Most Accurate Estimate and the Zacks Consensus Estimate of $2.52.

CDW is just one of a large group of Computer and Technology stocks with a positive ESP figure. 8x8 (EGHT) is another qualifying stock you may want to consider.

8x8, which is readying to report earnings on October 27, 2022, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.06 a share, and EGHT is seven days out from its next earnings report.

For 8x8, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.04 is 66.67%.

CDW and EGHT'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 >>


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
 
CDW Corporation (CDW) : Free Stock Analysis Report
 
8x8 Inc (EGHT) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research