If you are looking for a stock which has a solid history of beating earnings estimates and is in a great place to sustain the pattern in its next quarterly report, you need to consider Advanced Micro Devices (AMD). This company, which happens to be in the Zacks Electronics – Semiconductors industry, shows ability for another earnings beat.
This particular chipmaker has an established record of topping earnings estimates, particularly when looking at the earlier 2 reports. The company boasts an average surprise for the past 2 quarters of 13.19 %.
For probably the most recent quarter, Advanced Micro was anticipated to publish earnings of $0.36 per share, but it reported $0.41 per share instead, representing a surprise of 13.89 %. For the prior quarter, the consensus estimate was $0.16 per AMD share, while it actually produced $0.18 per share, a surprise of 12.50 %.
Price and EPS Surprise
Thanks in part to this past, there has been a favorable change of earnings estimates for Advanced Micro lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is actually an excellent indicator of an earnings beat, particularly when combined with its strong Zacks Rank.
The research of ours shows that stocks with the combination of a positive Earnings ESP & a Zacks Rank #3 (Hold) or even better deliver a good surprise nearly 70 % of the moment. Put simply, in case you have ten stocks with this blend, the number of stocks that beat the consensus estimate is usually as high as 7.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is actually a version of the Zacks Consensus whose definition is actually connected to change. The thought here’s that analysts revising their estimates straightaway before an earnings release contain the most recent info, which may likely become more accurate compared to what they and some leading to the consensus had predicted previously.
Advanced Micro has an Earnings ESP of +3.23 % at the second, hinting that analysts have developed bullish on its near-term earnings potential. Once you incorporate this positive Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is possibly around the corner.
When the Earnings ESP comes up negative, investors should be aware this will lower the predictive power of the metric. Nonetheless, a negative value is not indicative of a stock’s earnings miss.
Many organizations wind up beating the consensus EPS appraisal, but that might not be the lone justification for their stocks moving higher. On the other hand, some stocks may hold their ground even in case they end up missing the consensus estimate.
Because of this particular, it is truly crucial that you examine a company’s Earnings ESP in front of its quarterly release to increase the chances of success. You’ll want to utilize our Earnings ESP Filter to uncover the very best stocks to purchase or promote before they’ve reported.