June 28, 2022

In case you’re searching for a stock that has a solid history of beating earnings estimates and is in an excellent place to manage the trend in its next quarterly report, you should think about Advanced Micro Devices (AMD). This business, and that is in the Zacks Electronics – Semiconductors business, shows capability for another earnings beat.

This particular chipmaker has an established record of topping earnings estimates, especially when looking at the previous 2 reports. The company boasts an average surprise for the past 2 quarters of 13.19 %.

For pretty much 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 earlier quarter, the consensus estimate was $0.16 per AMD share, while it actually produced $0.18 per share, a surprise of 12.50 %.

Cost as well as EPS Surprise

Thanks in part to this particular past, there continues to be 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 actually a good indicator of an earnings beat, mainly when matched with its strong Zacks Rank.

Our investigation shows that stocks with the combination of a confident Earnings ESP & a Zacks Rank #3 (Hold) or better make a good surprise about 70 % of the moment. Put simply, in case you have 10 stocks with this particular blend, the number of stocks that outdo the consensus estimate is usually as high as seven.

The Zacks Earnings ESP compares 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 description is actually connected to change. The thought here’s that analysts revising the estimates of theirs right before an earnings release contain the latest information, which might potentially become more precise compared to what they and others bringing about the consensus had predicted previously.

Advanced Micro has an Earnings ESP of +3.23 % at the moment, hinting that analysts have grown bullish on its near-term earnings potential. As soon as you incorporate this good Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is possibly around the corner.

Whenever the Earnings ESP comes up unfavorable, investors must be aware that this will lower the predictive power of the metric. However, a negative value isn’t indicative of a stock’s earnings miss.

Many organizations wind up beating the consensus EPS appraisal, but that may not be the sole basis for their stocks moving higher. On the other hand, several stocks may keep the ground of theirs even in case they wind up missing the consensus estimate.

Because of this, it’s truly crucial that you look at a company’s Earnings ESP ahead of its quarterly release to increase the chances of success. Be sure to utilize our Earnings ESP Filter to uncover the best stocks to purchase or possibly sell before they have reported.