In case you’re searching for a stock that has a solid history of beating earnings estimates and it is in an excellent place to maintain the pattern in its next quarterly report, you need to think about Advanced Micro Devices (AMD). This company, and that is in the Zacks Electronics – Semiconductors business, shows ability for another earnings beat.
This particular chipmaker has an established history of topping earnings estimates, particularly when looking at the earlier two reports. The company boasts an average surprise for the past 2 quarters of 13.19 %.
For 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 preceding quarter, the consensus estimation 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 history, there has been a favorable change of earnings estimates for Advanced Micro lately. In reality, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great sign of an earnings beat, mainly when coupled with the strong Zacks Rank of its.
The research of ours shows that stocks with the combination of an optimistic Earnings ESP & a Zacks Rank #3 (Hold) or much better deliver a positive surprise almost 70 % of the moment. Quite simply, if you have 10 stocks with this blend, the amount of stocks that beat the consensus estimate is usually as high as seven.
The Zacks Earnings ESP compares probably the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is actually associated to change. The thought here is that analysts revising the estimates of theirs directly before an earnings release have the most up info, which might potentially become more accurate compared to 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 evolved bullish on its near-term earnings potential. 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.
Whenever the Earnings ESP comes up negative, investors must note that this will reduce the predictive power of the metric. But, a negative value is not signs of a stock’s earnings miss.
A lot of companies wind up beating the consensus EPS appraisal, but that may not be the sole basis for their stocks moving higher. On the other hand, several stocks might keep their ground even if they end up missing the consensus estimate.
Due to this, it is really vital that you look at a company’s Earnings ESP in advance of its quarterly release to raise the chances of success. You’ll want to utilize our Earnings ESP Filter to uncover the best stocks to purchase or even promote before they have reported.