Why Investors Need to Take Advantage of These 2 Computer and Technology Stocks Now
Two factors often determine stock prices in the long run: earnings and interest rates. Investors can’t control the latter, but they can focus on a company’s earnings results every quarter.
The earnings figure itself is key, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb even higher.
The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information. With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure.
Now that we understand what the ESP is and how beneficial it can be, let’s dive into a stock that currently fits the bill. T-Mobile (TMUS) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at $2.30 a share, just 30 days from its upcoming earnings release on January 23, 2025.
By taking the percentage difference between the $2.30 Most Accurate Estimate and the $2.14 Zacks Consensus Estimate, T-Mobile has an Earnings ESP of 7.03%.
TMUS is part of a big group of Computer and Technology stocks that boast a positive ESP, and investors may want to take a look at Cisco Systems (CSCO) as well.
Cisco Systems is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on February 12, 2025. CSCO’s Most Accurate Estimate sits at $0.91 a share 50 days from its next earnings release.
Cisco Systems’ Earnings ESP figure currently stands at 0.25% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.91.
TMUS and CSCO’s positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they’re reported for profitable earnings season trading. Check it out here >>
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