If you are looking for a stock with an excellent history of beating earnings estimates and it is in an excellent spot to sustain the movement in the next quarterly report of its, you need to consider Advanced Micro Devices (AMD). This company, which happens to be in the Zacks Electronics – Semiconductors business, shows ability for another earnings beat.
This chipmaker has an established history of topping earnings estimates, especially when looking at the prior two reports. The company boasts an average surprise for the past 2 quarters of 13.19 %.
For likely the most recent quarter, Advanced Micro was expected to publish earnings of $0.36 per share, but it reported $0.41 per share rather, representing a surprise of 13.89 %. For the earlier quarter, the consensus estimation was $0.16 per AMD share, while it really produced $0.18 per share, a surprise of 12.50 %.
Cost and EPS Surprise
Thanks in part to this particular history, there continues to be a favorable change of earnings estimates for Advanced Micro lately. In truth, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is good, which is actually a good indicator of an earnings beat, especially when coupled with the strong Zacks Rank of its.
Our research shows that stocks with the combination of an optimistic Earnings ESP & a Zacks Rank #3 (Hold) or perhaps better produce a positive surprise nearly 70 % of the time. Put simply, if you’ve ten stocks with this 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; the Most Accurate Estimate is actually a version of the Zacks Consensus whose definition is actually associated to change. The thought here’s that analysts revising their estimates directly before an earnings release contain the most recent info, which could likely be more precise compared to what they and others leading to the consensus had predicted previously.
Advanced Micro has an Earnings ESP of +3.23 % at the second, hinting that analysts have evolved bullish on the near-term earnings possibilities of its. When you combine this positive Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is perhaps nearby.
If ever the Earnings ESP comes up negative, investors must be aware this will lower the predictive power of the metric. Nevertheless, a bad value just isn’t indicative of a stock’s earnings miss.
Many companies wind up beating the consensus EPS estimate, but that might not be the single justification for their stocks moving higher. On the other hand, some stocks might keep the ground of theirs even if they end up missing the consensus estimate.
Because of this, it is really crucial that you examine a company’s Earnings ESP ahead of its quarterly discharge to increase the odds of success. Be sure to use our Earnings ESP Filter to uncover the most effective stocks to buy or promote before they have reported.