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.
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 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.
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.
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 Advance Auto Parts?
The final step today is to look at a stock that meets our ESP qualifications. Advance Auto Parts (AAP) earns a #3 (Hold) 16 days from its next quarterly earnings release on October 30, 2025, and its Most Accurate Estimate comes in at $0.82 a share.
AAP has an Earnings ESP figure of +6.98%, which, as explained above, is calculated by taking the percentage difference between the $0.82 Most Accurate Estimate and the Zacks Consensus Estimate of $0.76. Advance Auto Parts 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.
AAP is just one of a large group of Retail and Wholesale stocks with a positive ESP figure. Dollar General (DG) is another qualifying stock you may want to consider.
Dollar General, which is readying to report earnings on December 4, 2025, sits at a Zacks Rank #2 (Buy) right now. Its Most Accurate Estimate is currently $1.06 a share, and DG is 51 days out from its next earnings report.
Dollar General's Earnings ESP figure currently stands at +11.31% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.95.
Because both stocks hold a positive Earnings ESP, AAP and DG could potentially post earnings beats in their next reports.
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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Advance Auto Parts, Inc. (AAP): Free Stock Analysis Report Dollar General Corporation (DG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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