If you are searching for a stock which has an excellent history of beating earnings estimates and it is in a great place to sustain the pattern in the next quarterly report of its, you should think about Advanced Micro Devices (AMD). This company, which happens to be in the Zacks Electronics – Semiconductors business, shows potential for another earnings beat.
This chipmaker has an established history of topping earnings estimates, specifically when looking at the earlier 2 reports. The company boasts an average surprise for the past two quarters of 13.19 %.
For probably the most recent quarter, Advanced Micro was anticipated to post earnings of $0.36 per share, but it reported $0.41 per share rather, representing a surprise of 13.89 %. For the prior 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 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 positive, which is actually a good sign of an earnings beat, mainly when matched with the solid Zacks Rank of its.
The investigation of ours shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better deliver a positive surprise almost seventy % of the moment. In other words, if you’ve ten stocks with this blend, the amount of stocks that beat the consensus estimate is usually 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 a version of the Zacks Consensus whose definition is actually related to change. The thought here’s that analysts revising the estimates of theirs straightaway before an earnings release have the latest info, which could likely be a little more precise compared to what they while others contributing to the consensus had predicted previously.
Advanced Micro has an Earnings ESP of +3.23 % at the moment, suggesting that analysts have developed bullish on its near-term earnings potential. As soon as you incorporate this good Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is possibly around the corner.
If ever the Earnings ESP comes up negative, investors should note this will decrease the predictive power of the metric. Nonetheless, a bad value just isn’t indicative of a stock’s earnings miss.
Many companies end up beating the consensus EPS estimate, but that might not be the main basis for their stocks moving higher. On the other hand, several stocks could keep the ground of theirs even in case they wind up missing the consensus estimate.
Because of this particular, it’s seriously important to examine a company’s Earnings ESP in advance of its quarterly discharge to increase the chances of success. Make sure to utilize our Earnings ESP Filter to uncover the most effective stocks to invest in or maybe sell before they’ve reported.