In case you’re searching for a stock with an excellent history of beating earnings estimates and it is in an excellent position to manage the trend in the next quarterly report of its, you should think about Advanced Micro Devices (AMD). This company, and that is in the Zacks Electronics – Semiconductors business, shows capability for another earnings beat.
This chipmaker has an established history of topping earnings estimates, particularly when looking at the preceding two reports. The company boasts an average surprise for the past 2 quarters of 13.19 %.
For probably the most recent quarter, Advanced Micro was anticipated to submit earnings of $0.36 per share, but it reported $0.41 per share instead, representing a surprise of 13.89 %. For the preceding quarter, the consensus estimate was $0.16 per AMD share, while it actually produced $0.18 per share, a surprise of 12.50 %.
Cost as well as EPS Surprise
Thanks in part to this particular history, there continues to be a favorable change of earnings estimates for Advanced Micro lately. In truth, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is actually good, which is a good indicator of an earnings beat, mainly when matched with its strong Zacks Rank.
Our investigation shows that stocks with the blend of a positive Earnings ESP & a Zacks Rank #3 (Hold) or much better produce a good surprise nearly seventy % of the moment. Quite simply, if you have 10 stocks with this particular blend, 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 a version of the Zacks Consensus whose definition is associated to change. The thought here is that analysts revising the estimates of theirs directly before an earnings release have the latest info, which may potentially become more accurate compared to what they while others leading to the consensus had predicted previously.
Advanced Micro has an Earnings ESP of +3.23 % at the moment, suggesting that analysts have evolved bullish on its near term earnings potential. When you combine this good Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is perhaps around the corner.
When the Earnings ESP comes up unfavorable, investors must be aware this will reduce the predictive power of the metric. However, a negative value isn’t signs of a stock’s earnings miss.
Many organizations wind up beating the consensus EPS estimate, but that is quite possibly not the sole basis for their stocks moving higher. On the other hand, some stocks could hold the ground of theirs even if they wind up missing the consensus estimate.
Because of this, it’s truly important to look at 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 or even advertise before they’ve reported.