If you are looking for a stock with an excellent history of beating earnings estimates and it is in a great position to maintain the movement in its next quarterly report, you ought to consider Advanced Micro Devices (AMD). This company, and that is in the Zacks Electronics – Semiconductors industry, shows ability for another earnings beat.
This particular chipmaker has an established history of topping earnings estimates, particularly when looking at the previous two reports. The company boasts an average surprise for the past 2 quarters of 13.19 %.
For the most recent quarter, Advanced Micro was likely to publish 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 actually produced $0.18 per share, a surprise of 12.50 %.
Price as well as EPS Surprise
Thanks in part to this particular history, there has been a favorable change of earnings estimates for Advanced Micro lately. In truth, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is good, which is actually a great sign of an earnings beat, especially when combined with its strong Zacks Rank.
The research of ours shows that stocks with the mix of a positive Earnings ESP and a Zacks Rank #3 (Hold) or perhaps much better make a positive surprise almost 70 % of the time. Put simply, if you’ve ten stocks with this particular blend, the number of stocks that beat 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 concept here is that analysts revising the estimates of theirs directly before an earnings release hold the latest info, which could likely be a little more precise than what they and some contributing to the consensus had predicted earlier.
Advanced Micro has an Earnings ESP of +3.23 % at the moment, hinting that analysts have developed bullish on its near-term earnings possibilities. Once you incorporate this good Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is probably nearby.
When the Earnings ESP comes up unfavorable, investors must note that this will lower the predictive power of the metric. Nevertheless, a negative value isn’t indicative of a stock’s earnings miss.
Many organizations end up beating the consensus EPS estimate, but that might not be the lone justification for their stocks moving higher. On the other hand, some stocks could keep the ground of theirs even if they end up missing the consensus estimate.
Because of this, it’s seriously vital that you examine a company’s Earnings ESP ahead of its quarterly discharge to raise the chances of success. Make sure to use our Earnings ESP Filter to uncover the best stocks to buy as well as advertise before they have reported.