Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.

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 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.

The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. Nike (NKE) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $0.29 a share 22 days away from its upcoming earnings release on March 20, 2025.

By taking the percentage difference between the $0.29 Most Accurate Estimate and the $0.28 Zacks Consensus Estimate, Nike has an Earnings ESP of 1.43%.

NKE is just one of a large group of Consumer Discretionary stocks with a positive ESP figure. Wynn Resorts (WYNN) is another qualifying stock you may want to consider.

Wynn Resorts is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on May 6, 2025. WYNN's Most Accurate Estimate sits at $1.31 a share 69 days from its next earnings release.

For Wynn Resorts, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.28 is 1.84%.

NKE and WYNN'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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NIKE, Inc. (NKE) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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