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.
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. Fidelity National Information Services (FIS) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at $1.22 a share, just 26 days from its upcoming earnings release on May 5, 2025.
By taking the percentage difference between the $1.22 Most Accurate Estimate and the $1.20 Zacks Consensus Estimate, Fidelity National Information Services has an Earnings ESP of 2.06%.
FIS is part of a big group of Business Services stocks that boast a positive ESP, and investors may want to take a look at Booz Allen Hamilton (BAH) as well.
Slated to report earnings on May 23, 2025, Booz Allen Hamilton holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.68 a share 44 days from its next quarterly update.
The Zacks Consensus Estimate for Booz Allen Hamilton is $1.59, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 5.74%.
Because both stocks hold a positive Earnings ESP, FIS and BAH could potentially post earnings beats in their next reports.
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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Fidelity National Information Services, Inc. (FIS) : Free Stock Analysis Report
Booz Allen Hamilton Holding Corporation (BAH) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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