Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.

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.

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. Steel Dynamics (STLD) earns a Zacks Rank #2 right now and its Most Accurate Estimate sits at $1.39 a share, just 11 days from its upcoming earnings release on April 22, 2025.

By taking the percentage difference between the $1.39 Most Accurate Estimate and the $1.36 Zacks Consensus Estimate, Steel Dynamics has an Earnings ESP of 2.09%.

STLD is part of a big group of Basic Materials stocks that boast a positive ESP, and investors may want to take a look at Kinross Gold (KGC) as well.

Slated to report earnings on May 6, 2025, Kinross Gold holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.25 a share 25 days from its next quarterly update.

For Kinross Gold, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.21 is 18.07%.

Because both stocks hold a positive Earnings ESP, STLD and KGC could potentially post earnings beats in their next reports.

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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Steel Dynamics, Inc. (STLD) : Free Stock Analysis Report

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

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