Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.

2 Stocks to Add to Your Watchlist

The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.

The final step today is to look at a stock that meets our ESP qualifications. Carvana (CVNA) earns a Zacks Rank #1 14 days from its next quarterly earnings release on February 19, 2025, and its Most Accurate Estimate comes in at $0.27 a share.

By taking the percentage difference between the $0.27 Most Accurate Estimate and the $0.24 Zacks Consensus Estimate, Carvana has an Earnings ESP of 12.5%.

CVNA is one of just a large database of Retail-Wholesale stocks with positive ESPs. Another solid-looking stock is American Eagle Outfitters (AEO).

American Eagle Outfitters, which is readying to report earnings on March 6, 2025, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.50 a share, and AEO is 29 days out from its next earnings report.

For American Eagle Outfitters, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.50 is 0.19%.

CVNA and AEO's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

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 >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Carvana Co. (CVNA) : Free Stock Analysis Report

American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research