If you’re looking for a stock that has a solid history of beating earnings estimates and is in a good position to sustain the trend in the next quarterly report of its, you ought to consider Advanced Micro Devices (AMD). This company, which happens to be in the Zacks Electronics – Semiconductors industry, shows capability for another earnings beat.
This chipmaker has an established record of topping earnings estimates, particularly when looking at the previous 2 reports. The company boasts an average surprise in the past 2 quarters of 13.19 %.
For the most recent quarter, Advanced Micro was anticipated to submit earnings of $0.36 per share, but it reported $0.41 per share instead, representing a surprise of 13.89 %. For the preceding 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 history, there has been a favorable change in earnings estimates for Advanced Micro lately. In truth, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a good warning of an earnings beat, mainly when matched with its solid Zacks Rank.
The research of ours shows that stocks with the combination of an optimistic Earnings ESP & a Zacks Rank #3 (Hold) or better produce a good surprise nearly 70 % of the moment. Put simply, in case you’ve 10 stocks with this particular combination, the amount of stocks that beat the consensus estimate is usually as high as seven.
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 concept here is that analysts revising their estimates straightaway before an earnings release contain the latest info, which might potentially be more accurate than what they and some leading to the consensus had predicted previously.
Advanced Micro has an Earnings ESP of +3.23 % at the moment, hinting that analysts have evolved bullish on the near term earnings possibilities of its. As soon as you incorporate this positive Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is probably around the corner.
When the Earnings ESP comes up negative, investors should note this will decrease the predictive power of the metric. But, a negative value is not signs of a stock’s earnings miss.
A lot of companies end up beating the consensus EPS appraisal, but that might not be the lone foundation for their stocks moving higher. On the other hand, several stocks might hold their ground even in case they end up missing the consensus estimate.
Due to this, it is really vital that you examine a company’s Earnings ESP ahead of its quarterly release to raise the likelihood of success. You’ll want to utilize our Earnings ESP Filter to uncover the most effective stocks to invest in or even sell before they’ve reported.