If you’re looking for a stock with a great history of beating earnings estimates and is in an excellent place to manage the trend in its next quarterly report, you need to consider Advanced Micro Devices (AMD). This business, and that is in the Zacks Electronics – Semiconductors industry, shows potential for another earnings beat.
This chipmaker has an established history of topping earnings estimates, particularly when looking at the prior 2 reports. The company boasts an average surprise in the past two quarters of 13.19 %.
For the most recent quarter, Advanced Micro was expected to submit 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 really produced $0.18 per share, a surprise of 12.50 %.
Cost 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 good, which is an excellent indicator of an earnings beat, mainly when matched with its strong Zacks Rank.
The research of ours shows that stocks with the mix of an optimistic Earnings ESP & a Zacks Rank #3 (Hold) or better produce a good surprise about 70 % of the time. Put simply, in case you have 10 stocks with this blend, the number of stocks that match the consensus estimate might be as high as 7.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; probably the Most Accurate Estimate is actually a version of the Zacks Consensus whose description is actually associated to change. The concept here is that analysts revising their estimates straightaway before an earnings release hold the latest information, which may potentially be more precise than what they while others contributing to the consensus had predicted previously.
Advanced Micro has an Earnings ESP of +3.23 % at the second, suggesting that analysts have evolved bullish on its near-term earnings potential. Once you combine this positive Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is perhaps around the corner.
When the Earnings ESP comes up unfavorable, investors must note this will reduce the predictive power of the metric. Nonetheless, a bad value is not signs 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, several stocks might hold their ground even in case they wind up missing the consensus estimate.
Because of this particular, it is seriously important to examine a company’s Earnings ESP in advance of its quarterly release to raise the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the very best stocks to purchase or sell before they’ve reported.