Quarterly financial reports play a vital role on Wall Street, helping investors see how a company has performed and what might happen in the near term. And among all the parameters and results to consider, revenue is one of the most important.
Life and the stock market are both about expectations, and going beyond what is expected is often rewarded, while failure can have negative consequences. Investors might want to try and capture higher returns by finding positive earnings surprises.
2 stocks to add to your watchlist
The Zacks Earnings ESP is more formally known as the Expected Surprise Forecast, and it aims to capture the inside trail on the latest analyst estimate revisions ahead of a company’s report. The idea is relatively intuitive because a new projection could 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.
The final step today is to review a stock that meets our ESP qualifications. Enova International (ENVA) gains a Zacks No. 3 rank 23 days after its next quarterly earnings release on Aug. 4, 2022, and its most accurate estimate is $1.60 per share.
Taking the percentage difference between the most accurate estimate of $1.60 and the Zacks consensus estimate of $1.59, Enova International has a gain ESP of 0.95%.
ENVA is one of a large group of financial stocks that boast a positive ESP, and investors may want to take a look at American Express (AXP) as well.
Scheduled to report earnings on July 22, 2022, American Express holds a No. 3 (Hold) ranking on the Zacks ranking, and its most accurate estimate is $2.42 per share 10 days from its next quarterly update. .
Zacks’ consensus estimate for American Express is $2.38, and when you take the percentage difference between that number and his most accurate estimate, you get the ESP figure of 1.9%.
Positive ESP numbers from ENVA and AXP tell us that both stocks have a good chance of beating analysts’ expectations in their upcoming earnings report.
Find stocks to buy or sell before they are flagged
Use the Zacks Earnings ESP filter to surface stocks with the highest probability of positive or negative surprises to buy or sell before they are reported for profitable trades during earnings season. 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
Enova International, Inc. (ENVA): Free Stock Analysis Report
American Express Company (AXP): Free Inventory Analysis Report
