How to Find Strong Computer and Technology Stocks Slated for Positive Earnings Surprises

Two factors often determine stock prices in the long run: earnings and interest rates. Investors can’t control the latter, but they can focus on a company’s earnings results every quarter.

We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.

2 Stocks to Add to Your Watchlist

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. Silicon Motion (SIMO) earns a Zacks Rank #2 right now and its Most Accurate Estimate sits at $0.97 a share, just six days from its upcoming earnings release on August 1, 2024.

SIMO has an Earnings ESP figure of 2.32%, which, as explained above, is calculated by taking the percentage difference between the $0.97 Most Accurate Estimate and the Zacks Consensus Estimate of $0.95.

SIMO is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Carrier Global (CARR).

Carrier Global, which is readying to report earnings on October 24, 2024, sits at a Zacks Rank #3 (Hold) right now. It’s Most Accurate Estimate is currently $0.90 a share, and CARR is 90 days out from its next earnings report.

The Zacks Consensus Estimate for Carrier Global is $0.90, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 0.45%.

SIMO and CARR’s positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

Find Stocks to Buy or Sell Before They’re Reported

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 >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Story continues

Silicon Motion Technology Corporation (SIMO) : Free Stock Analysis Report

Carrier Global Corporation (CARR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research