In case you are searching for a stock that has an excellent history of beating earnings estimates and is in an excellent position to manage the trend in its next quarterly report, you ought to think about Advanced Micro Devices (AMD). This business, and that is in the Zacks Electronics – Semiconductors industry, shows capability for another earnings beat.
This particular chipmaker has an established history of topping earnings estimates, especially when looking at the prior 2 reports. The company boasts an average surprise in the past 2 quarters of 13.19 %.
For the most recent quarter, Advanced Micro was likely to publish 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 estimate was $0.16 per AMD share, while it actually produced $0.18 per share, a surprise of 12.50 %.
Cost and EPS Surprise
Thanks in part to this past, there continues to be a favorable change in earnings estimates for Advanced Micro lately. In reality, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is good, which is an excellent indicator of an earnings beat, especially when combined with its solid Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or perhaps better produce a good surprise about seventy % of the moment. In other words, in case you have 10 stocks with this particular combination, the number of stocks that outdo 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 definition is associated to change. The concept here’s that analysts revising the estimates of theirs right before an earnings release hold the most up info, which could likely be more accurate compared to what they and others bringing about the consensus had predicted earlier.
Advanced Micro has an Earnings ESP of +3.23 % at the moment, suggesting that analysts have evolved bullish on the near-term earnings possibilities of its. Once you incorporate this positive Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is perhaps around the corner.
If ever the Earnings ESP comes up negative, investors should be aware this will reduce the predictive power of the metric. But, a bad value is not indicative of a stock’s earnings miss.
Many companies end up beating the consensus EPS estimate, but that may not be the sole justification for their stocks moving higher. On the other hand, several stocks could keep the ground of theirs even in case they end up missing the consensus estimate.
Due to this, it is really vital that you look at a company’s Earnings ESP in front of its quarterly release to raise the odds of success. Make sure to use our Earnings ESP Filter to uncover the best stocks to buy or even sell before they’ve reported.