Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
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.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% 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 Corning?
The final step today is to look at a stock that meets our ESP qualifications. Corning (GLW) earns a #2 (Buy) 27 days from its next quarterly earnings release on October 28, 2025, and its Most Accurate Estimate comes in at $0.67 a share.
By taking the percentage difference between the $0.67 Most Accurate Estimate and the $0.66 Zacks Consensus Estimate, Corning has an Earnings ESP of +1.90%. Investors should also know that GLW is one of a large group 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.
GLW 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 Accenture (ACN) as well.
Accenture, which is readying to report earnings on December 18, 2025, sits at a Zacks Rank #3 (Hold) right now. Its Most Accurate Estimate is currently $3.76 a share, and ACN is 78 days out from its next earnings report.
Accenture's Earnings ESP figure currently stands at +1.15% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $3.71.
GLW and ACN'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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Corning Incorporated (GLW): Free Stock Analysis Report Accenture PLC (ACN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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