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.
The earnings figure itself is key, of course, 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 and vice versa.
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 is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.
Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.
Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.
Should You Consider Cigna?
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. Cigna (CI) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $7.73 a share, just 30 days from its upcoming earnings release on October 30, 2025.
CI has an Earnings ESP figure of +0.43%, which, as explained above, is calculated by taking the percentage difference between the $7.73 Most Accurate Estimate and the Zacks Consensus Estimate of $7.7. Cigna 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.
CI is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is Amgen (AMGN).
Amgen is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on October 29, 2025. AMGN's Most Accurate Estimate sits at $5.05 a share 29 days from its next earnings release.
Amgen's Earnings ESP figure currently stands at +0.72% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $5.01.
CI and AMGN's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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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Cigna Group (CI): Free Stock Analysis Report Amgen Inc. (AMGN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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