In case you’re searching for a stock which has an excellent history of beating earnings estimates and is in a good place to maintain the trend in the next quarterly report of its, you need to consider Advanced Micro Devices (AMD). This company, and that is in the Zacks Electronics – Semiconductors business, shows capability for another earnings beat.
This chipmaker has an established record of topping earnings estimates, especially when looking at the earlier 2 reports. The company boasts an average surprise for the past 2 quarters of 13.19 %.
For the most recent quarter, Advanced Micro was expected to publish earnings of $0.36 per share, but it reported $0.41 per share rather, representing a surprise of 13.89 %. For the preceding quarter, the consensus estimate 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 of earnings estimates for Advanced Micro lately. In truth, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is actually good, which is an excellent sign of an earnings beat, mainly when coupled with its strong Zacks Rank.
The research of ours shows that stocks with the blend of a positive Earnings ESP & a Zacks Rank #3 (Hold) or perhaps better produce a positive surprise about seventy % of the moment. In other words, if you have 10 stocks with this blend, the number of stocks that outdo the consensus estimate might be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is actually a version of the Zacks Consensus whose description is actually connected to change. The concept here’s that analysts revising their estimates right before an earnings release hold the most recent information, which may likely become more precise than what they and others leading to the consensus had predicted earlier.
Advanced Micro has an Earnings ESP of +3.23 % at the second, hinting that analysts have evolved bullish on its near term earnings potential. When you combine this good Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is possibly nearby.
When the Earnings ESP comes up negative, investors should be aware this will lower the predictive power of the metric. But, a bad value isn’t signs of a stock’s earnings miss.
Many businesses end up beating the consensus EPS estimate, but that might not be the lone justification for their stocks moving higher. On the other hand, some stocks could keep their ground even if they wind up missing the consensus estimate.
Due to this, it is really crucial that you examine a company’s Earnings ESP in front of its quarterly discharge to raise the chances of success. Make sure you use our Earnings ESP Filter to uncover the very best stocks to invest in or maybe sell before they have reported.