Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. However, the model's predictive power is significant for positive ESP readings only.Ī positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. Our proprietary surprise prediction model - the Zacks Earnings ESP (Expected Surprise Prediction) - has this insight at its core. Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.Įstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. The consensus EPS estimate for the quarter has been revised 0.28% lower over the last 30 days to the current level. Revenues are expected to be $20.2 billion, down 22.7% from the year-ago quarter. ![]() This computer and technology services provider is expected to post quarterly earnings of $0.86 per share in its upcoming report, which represents a year-over-year change of -53.3%. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. On the other hand, if they miss, the stock may move lower. ![]() The earnings report, which is expected to be released on June 1, 2023, might help the stock move higher if these key numbers are better than expectations. ![]() This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The market expects Dell Technologies ( DELL Quick Quote DELL - Free Report) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended April 2023.
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