Wall Street relies heavily on quarterly financial reports to keep tabs on companies' performance and provide insight into what the future holds. Earnings are among the most significant measurements and outcomes to take into account
While the earnings figure is critical, the bottom line beat or miss can be equally, if not more, crucial at times. Investors would be wise to keep a careful eye on these earnings surprises, as a strong performance might propel a company to even greater heights.
The most recent analyst earnings revisions are used by the Zacks Expected Surprise Prediction (ESP), which is designed to be more accurate than projections made weeks or months before to the actual announcement date.
The reasoning is simple: analysts with more time to gather information are more likely to have accurate profit forecasts provided closer to the report. That being said, the Expected Surprise Prediction takes into consideration both the Most Accurate Estimate, which is the most current, and the overall Zacks Consensus Estimate. The ESP figure is given by the percentage difference.
Examining a stock that satisfies our ESP requirements is the last task for today. Thirty days before its next quarterly earnings release on May 2, 2024, Moderna (MRNA) receives a Zacks Rank #3. The Most Accurate Estimate for the share price comes in at -$3.20.
An Earnings ESP of 4.89% was calculated for Moderna by subtracting the -3.20 Most Accurate Estimate from the -3.36 Zacks Consensus Estimate. A lot of medical stocks have a positive ESP figure, and MRNA is only one of them. You could also think about investing in Pfizer (PFE), another qualified stock.
Pfizer is expected to announce its earnings on May 7, 2024, and it is currently ranked #3 (Hold) on the Zacks Rank. Approximately 35 days before its next quarterly update, the company's Most Accurate Estimate is $0.66 per share.
The Zacks Consensus Estimate for Pfizer is $0.57, which is 15.03% lower than its Most Accurate Estimate. The favorable ESP numbers for MRNA and PFE indicate that both stocks are likely to outperform analyst forecasts when they announce their earnings next week.
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