In case you are searching for a stock that has a solid history of beating earnings estimates and is in an excellent position to manage the pattern in its next quarterly report, you ought to think about Advanced Micro Devices (AMD). This business, which is in the Zacks Electronics – Semiconductors business, shows ability for another earnings beat.
This chipmaker has an established history of topping earnings estimates, specifically when looking at the preceding two reports. The company boasts an average surprise in the past two quarters of 13.19 %.
For 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 prior quarter, the consensus estimate was $0.16 per AMD share, while it really produced $0.18 per share, a surprise of 12.50 %.
Cost and EPS Surprise
Thanks in part to this particular past, there has been 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 an excellent warning of an earnings beat, mainly when coupled with its solid Zacks Rank.
The research of ours shows that stocks with the combination of an optimistic Earnings ESP & a Zacks Rank #3 (Hold) or even better make a positive surprise nearly seventy % of the moment. Quite simply, in case you’ve 10 stocks with this particular combination, the number of stocks that beat the consensus estimate could be as high as 7.
The Zacks Earnings ESP compares probably the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; probably the Most Accurate Estimate is actually a version of the Zacks Consensus whose definition is actually related to change. The thought here is that analysts revising the estimates of theirs right before an earnings release hold the most up info, which might likely be a little more accurate than what they and some bringing about the consensus had predicted earlier.
Advanced Micro has an Earnings ESP of +3.23 % at the second, suggesting 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.
When the Earnings ESP comes up negative, investors should note this will decrease the predictive power of the metric. Nevertheless, a negative value just isn’t indicative of a stock’s earnings miss.
A lot of companies wind up beating the consensus EPS estimate, but that may not be the lone basis for their stocks moving higher. On the other hand, some stocks could hold their ground even if they end up missing the consensus estimate.
Because of this particular, it is truly important to check a company’s Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the very best stocks to invest in or even advertise before they’ve reported.