In case you’re looking for a stock which has a great history of beating earnings estimates and it is in a good place to maintain the trend in the next quarterly report of its, you need to think about Advanced Micro Devices (AMD). This company, which happens to be in the Zacks Electronics – Semiconductors business, shows capability for another earnings beat.
This particular chipmaker has an established record of topping earnings estimates, especially when looking at the preceding 2 reports. The company boasts an average surprise for the past two quarters of 13.19 %.
For the most recent quarter, Advanced Micro was anticipated to post earnings of $0.36 per share, but it reported $0.41 per share rather, representing a surprise of 13.89 %. For the preceding quarter, the consensus estimate was $0.16 per AMD share, while it actually produced $0.18 per share, a surprise of 12.50 %.
Cost as well as EPS Surprise
Thanks in part to this past, there has been a favorable change of earnings estimates for Advanced Micro lately. In reality, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is actually good, which is a great sign of an earnings beat, especially when combined with the strong Zacks Rank of its.
The research of ours shows that stocks with the mix of a confident Earnings ESP and a Zacks Rank #3 (Hold) or better deliver a positive surprise about 70 % of the moment. In other words, in case you have 10 stocks with this particular combination, the amount of stocks that beat the consensus estimate might be as high as 7.
The Zacks Earnings ESP compares probably the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; probably the Most Accurate Estimate is a version of the Zacks Consensus whose description is related to change. The idea here’s that analysts revising the estimates of theirs right before an earnings release have the most recent info, which may potentially be a little more precise compared to what they and some bringing about the consensus had predicted earlier.
Advanced Micro has an Earnings ESP of +3.23 % at the moment, hinting that analysts have evolved bullish on its near-term earnings possibilities. As soon as you combine this positive Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is probably around the corner.
If ever the Earnings ESP comes up negative, investors should note that this will decrease the predictive power of the metric. Nevertheless, a negative value is not signs of a stock’s earnings miss.
Many businesses end up beating the consensus EPS estimate, but that is quite possibly not the single basis for their stocks moving higher. On the other hand, several stocks may hold the ground of theirs even if they end up missing the consensus estimate.
Due to this, it’s seriously crucial that you check a company’s Earnings ESP in advance of its quarterly release to increase the likelihood of success. Ensure that you utilize our Earnings ESP Filter to uncover the very best stocks to buy or possibly sell before they’ve reported.