In case you are searching for a stock which has a great history of beating earnings estimates and is in a great position to sustain the trend in its next quarterly report, you should think about Advanced Micro Devices (AMD). This company, and that is in the Zacks Electronics – Semiconductors industry, shows potential for another earnings beat.
This chipmaker has an established history of topping earnings estimates, especially when looking at the prior 2 reports. The company boasts an average surprise in the past 2 quarters of 13.19 %.
For probably the most recent quarter, Advanced Micro was expected to submit earnings of $0.36 per share, but it reported $0.41 per share rather, representing a surprise of 13.89 %. For the prior quarter, the consensus estimate was $0.16 per AMD share, while it really produced $0.18 per share, a surprise of 12.50 %.
Cost as well as EPS Surprise
Thanks in part to this past, there has been a favorable change in earnings estimates for Advanced Micro lately. In truth, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is good, which is a good warning of an earnings beat, especially when matched with the solid Zacks Rank of its.
Our investigation shows that stocks with the blend of a confident Earnings ESP & a Zacks Rank #3 (Hold) or perhaps better make a positive surprise almost seventy % of the time. In other words, in case you have 10 stocks with this combination, the number of stocks that outdo the consensus estimate is usually as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is actually a version of the Zacks Consensus whose definition is actually connected to change. The thought here is that analysts revising their estimates right before an earnings release hold the most up information, which might likely be more accurate than what they and others bringing about the consensus had predicted earlier.
Advanced Micro has an Earnings ESP of +3.23 % at the second, hinting that analysts have grown bullish on its near term earnings possibilities. As soon as you incorporate this good Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is probably around the corner.
If ever the Earnings ESP comes up unfavorable, investors must be aware this will reduce the predictive power of the metric. But, a negative value just isn’t indicative of a stock’s earnings miss.
A lot of companies wind up beating the consensus EPS estimate, but that might not be the sole justification for their stocks moving higher. On the other hand, some stocks could hold their ground even if they wind up missing the consensus estimate.
Because of this, it is truly important to check a company’s Earnings ESP in front of its quarterly release to increase the chances of success. You’ll want to use our Earnings ESP Filter to uncover the very best stocks to buy as well as promote before they have reported.