Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.
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.
Invest in Gold
The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. Verizon Communications (VZ) holds a Zacks Rank #3 at the moment and its Most Accurate Estimate comes in at $1.20 a share 28 days away from its upcoming earnings release on July 21, 2025.
Verizon Communications’ Earnings ESP sits at 1.37%, which, as explained above, is calculated by taking the percentage difference between the $1.20 Most Accurate Estimate and the Zacks Consensus Estimate of $1.18.
VZ is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Nutanix (NTNX).
Nutanix, which is readying to report earnings on August 27, 2025, sits at a Zacks Rank #3 (Hold) right now. It’s Most Accurate Estimate is currently $0.33 a share, and NTNX is 65 days out from its next earnings report.
For Nutanix, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.32 is 1.54%.
VZ and NTNX’s positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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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