Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.

The earnings figure itself is key, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb even higher.

2 Stocks to Add to Your Watchlist

The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information. With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure.

Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Tactile Systems Technology (TCMD) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at $0.19 a share, just 26 days from its upcoming earnings release on November 4, 2024.

Tactile Systems Technology's Earnings ESP sits at 7.04%, which, as explained above, is calculated by taking the percentage difference between the $0.19 Most Accurate Estimate and the Zacks Consensus Estimate of $0.18.

TCMD is just one of a large group of Medical stocks with a positive ESP figure. MannKind (MNKD) is another qualifying stock you may want to consider.

MannKind, which is readying to report earnings on November 5, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.04 a share, and MNKD is 27 days out from its next earnings report.

The Zacks Consensus Estimate for MannKind is $0.04, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 14.29%.

TCMD and MNKD's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

Find Stocks to Buy or Sell Before They're Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

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Tactile Systems Technology, Inc. (TCMD) : Free Stock Analysis Report

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