Want Better Returns? Don't Ignore These 2 Computer and Technology Stocks Set to Beat Earnings

Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.

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, 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.

Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. ServiceNow (NOW) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at $1.86 a share, just 20 days from its upcoming earnings release on October 26, 2022.

ServiceNow's Earnings ESP sits at 0.35%, which, as explained above, is calculated by taking the percentage difference between the $1.86 Most Accurate Estimate and the Zacks Consensus Estimate of $1.85.

NOW is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Hewlett Packard Enterprise (HPE).

Slated to report earnings on November 29, 2022, Hewlett Packard Enterprise holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.58 a share 54 days from its next quarterly update.

The Zacks Consensus Estimate for Hewlett Packard Enterprise is $0.57, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 1.75%.

NOW and HPE's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

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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ServiceNow, Inc. (NOW) : Free Stock Analysis Report
 
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