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.
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.
The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate. The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction.
The final step today is to look at a stock that meets our ESP qualifications. Novavax (NVAX) earns a Zacks Rank #3 10 days from its next quarterly earnings release on May 9, 2025, and its Most Accurate Estimate comes in at $1.12 a share.
NVAX has an Earnings ESP figure of 495.75%, which, as explained above, is calculated by taking the percentage difference between the $1.12 Most Accurate Estimate and the Zacks Consensus Estimate of $0.19.
NVAX is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is Agilent Technologies (A).
Slated to report earnings on May 28, 2025, Agilent Technologies holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.28 a share 29 days from its next quarterly update.
The Zacks Consensus Estimate for Agilent Technologies is $1.27, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 0.53%.
NVAX and A's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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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Novavax, Inc. (NVAX) : Free Stock Analysis Report
Agilent Technologies, Inc. (A) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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