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Why Investors Need to Take Advantage of These 2 Computer and Technology Stocks Now

Why Investors Need to Take Advantage of These 2 Computer and Technology Stocks Now

Earnings are arguably the most important single number on a company’s quarterly financial report. Wall Street clearly dives into all of the other metrics and management’s input, but the EPS figure helps cut through all the noise.

The earnings figure itself is key, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb even higher.

The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information. With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure.

The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. Yelp (YELP) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $0.57 a share 29 days away from its upcoming earnings release on February 20, 2025.

YELP has an Earnings ESP figure of 12.87%, which, as explained above, is calculated by taking the percentage difference between the $0.57 Most Accurate Estimate and the Zacks Consensus Estimate of $0.51.

YELP is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Shopify (SHOP).

Shopify is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on February 11, 2025. SHOP’s Most Accurate Estimate sits at $0.54 a share 20 days from its next earnings release.

The Zacks Consensus Estimate for Shopify is $0.44, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 23.08%.

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

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 >>

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