If you are looking for a stock with a solid history of beating earnings estimates and it is in a good position to manage the movement in its next quarterly report, you ought to think about Advanced Micro Devices (AMD). This company, which is in the Zacks Electronics – Semiconductors business, shows ability for another earnings beat.
This particular chipmaker has an established history of topping earnings estimates, especially when looking at the preceding 2 reports. The company boasts an average surprise in the past two quarters of 13.19 %.
For likely the most recent quarter, Advanced Micro was expected 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 really produced $0.18 per share, a surprise of 12.50 %.
Price 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 actually good, which is actually an excellent indicator of an earnings beat, mainly when matched with its solid Zacks Rank.
Our research shows that stocks with the blend of a confident Earnings ESP & a Zacks Rank #3 (Hold) or perhaps much better deliver a good surprise about 70 % of the moment. In other words, if you have 10 stocks with this particular blend, the number of stocks that match 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 actually a version of the Zacks Consensus whose definition is actually connected to change. The thought here is that analysts revising their estimates straightaway before an earnings release have the latest information, which may potentially be a little more precise than what they while others leading to the consensus had predicted earlier.
Advanced Micro has an Earnings ESP of +3.23 % at the second, suggesting that analysts have evolved bullish on the near term earnings possibilities of its. Once you combine this good Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is perhaps around the corner.
When the Earnings ESP comes up unfavorable, investors must be aware this will lower the predictive power of the metric. Nonetheless, a bad value just isn’t indicative of a stock’s earnings miss.
A lot of companies wind up beating the consensus EPS estimate, but that might not be the lone foundation for their stocks moving higher. On the other hand, several stocks may hold their ground even in case they wind up missing the consensus estimate.
Due to this, it is truly important to look at a company’s Earnings ESP ahead of its quarterly discharge to raise the chances of success. Be sure to utilize our Earnings ESP Filter to uncover the very best stocks to invest in or possibly sell before they’ve reported.