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

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, 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.

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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. Generac Holdings (GNRC) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $3.29 a share 12 days away from its upcoming earnings release on November 1, 2022.

By taking the percentage difference between the $3.29 Most Accurate Estimate and the $3.24 Zacks Consensus Estimate, Generac Holdings has an Earnings ESP of 1.54%.

GNRC is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Baidu Inc. (BIDU).

Baidu Inc. which is readying to report earnings on November 16, 2022, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently $2.46 a share, and BIDU is 27 days out from its next earnings report.

Baidu Inc.'s Earnings ESP figure currently stands at 0.82% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.44.

GNRC and BIDU'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 >>


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
 
Generac Holdings Inc. (GNRC) : Free Stock Analysis Report
 
Baidu, Inc. (BIDU) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research