Why Investors Need to Take Advantage of These 2 Retail and Wholesale Stocks Now

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.

Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.

The Zacks Earnings ESP, Explained

The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.

The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.

Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.

Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank.

Should You Consider Best Buy?

The final step today is to look at a stock that meets our ESP qualifications. Best Buy (BBY) earns a #3 (Hold) one day from its next quarterly earnings release on August 28, 2025, and its Most Accurate Estimate comes in at $1.26 a share.

BBY has an Earnings ESP figure of +3.56%, which, as explained above, is calculated by taking the percentage difference between the $1.26 Most Accurate Estimate and the Zacks Consensus Estimate of $1.22. Best Buy is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

BBY is part of a big group of Retail and Wholesale stocks that boast a positive ESP, and investors may want to take a look at Ulta Beauty (ULTA) as well.

Ulta Beauty is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on August 28, 2025. ULTA's Most Accurate Estimate sits at $5.13 a share one day from its next earnings release.

The Zacks Consensus Estimate for Ulta Beauty is $5.03, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +1.92%.

BBY and ULTA's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

Find Stocks to Buy or Sell Before They're Reported

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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This article originally published on Zacks Investment Research (zacks.com).

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