How to Find Strong Medical Stocks Slated for Positive Earnings Surprises

Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.

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.

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 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.

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 Exact Sciences?

The final step today is to look at a stock that meets our ESP qualifications. Exact Sciences (EXAS) earns a #1 (Strong Buy) 10 days from its next quarterly earnings release on November 3, 2025, and its Most Accurate Estimate comes in at $0.15 a share.

Exact Sciences' Earnings ESP sits at +56.25%, which, as explained above, is calculated by taking the percentage difference between the $0.15 Most Accurate Estimate and the Zacks Consensus Estimate of $0.1. EXAS is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

EXAS is just one of a large group of Medical stocks with a positive ESP figure. Incyte (INCY) is another qualifying stock you may want to consider.

Slated to report earnings on October 28, 2025, Incyte holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $1.72 a share four days from its next quarterly update.

Incyte's Earnings ESP figure currently stands at +3.48% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.66.

EXAS and INCY'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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