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.
The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. Workhorse Group (WKHS) holds a Zacks Rank #2 at the moment and its Most Accurate Estimate comes in at -$0.09 a share five days away from its upcoming earnings release on November 14, 2023.
By taking the percentage difference between the -$0.09 Most Accurate Estimate and the -$0.12 Zacks Consensus Estimate, Workhorse Group has an Earnings ESP of 21.74%.
WKHS is just one of a large group of Auto-Tires-Trucks stocks with a positive ESP figure. Nikola (NKLA) is another qualifying stock you may want to consider.
Nikola is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on February 22, 2024. NKLA's Most Accurate Estimate sits at -$0.09 a share 105 days from its next earnings release.
The Zacks Consensus Estimate for Nikola is -$0.14, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 35.71%.
Because both stocks hold a positive Earnings ESP, WKHS and NKLA 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 >>
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Workhorse Group, Inc. (WKHS) : Free Stock Analysis Report
Nikola Corporation (NKLA) : Free Stock Analysis Report
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November 09, 2023 at 09:00PM
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How to Find Strong Auto-Tires-Trucks Stocks Slated for Positive Earnings Surprises - Yahoo Finance
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