In case you are looking for a stock which has an excellent history of beating earnings estimates and is in a great place to maintain the trend in its next quarterly report, you need to consider Advanced Micro Devices (AMD). This company, which is in the Zacks Electronics – Semiconductors business, shows ability for another earnings beat.
This chipmaker has an established record of topping earnings estimates, specifically when looking at the prior 2 reports. The company boasts an average surprise in the past two quarters of 13.19 %.
For likely the most recent quarter, Advanced Micro was anticipated to post earnings of $0.36 per share, but it reported $0.41 per share rather, representing a surprise of 13.89 %. For the earlier quarter, the consensus estimate was $0.16 per AMD share, while it really produced $0.18 per share, a surprise of 12.50 %.
Price as well as EPS Surprise
Thanks in part to this particular past, there continues to be a favorable change in earnings estimates for Advanced Micro lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is actually positive, which is actually an excellent warning of an earnings beat, mainly when matched with the strong Zacks Rank of its.
Our research shows that stocks with the combination of a positive Earnings ESP & a Zacks Rank #3 (Hold) or even better deliver a positive surprise about 70 % of the moment. In other words, if you have ten stocks with this particular blend, the amount of stocks that match the consensus estimate might be 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 description is related to change. The thought here is that analysts revising the estimates of theirs directly before an earnings release contain the most up info, which could likely be a little more accurate compared to what they while others contributing to the consensus had predicted previously.
Advanced Micro has an Earnings ESP of +3.23 % at the moment, suggesting that analysts have developed bullish on the near term earnings potential of its. Once you incorporate this positive Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is probably nearby.
If ever the Earnings ESP comes up negative, investors must be aware that this will lower the predictive power of the metric. Nevertheless, a negative value is not indicative of a stock’s earnings miss.
Many organizations wind up beating the consensus EPS estimate, but that may not be the main foundation for their stocks moving higher. On the other hand, several stocks could hold the ground of theirs even in case they end up missing the consensus estimate.
Because of this particular, it’s really crucial that you examine a company’s Earnings ESP in advance of its quarterly discharge to increase the likelihood of success. Be sure to use our Earnings ESP Filter to uncover the best stocks to invest in or maybe advertise before they have reported.