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.
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.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
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 ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), 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 Blackstone Inc.?
The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to quickly look at a qualifying stock. Blackstone Inc. (BX) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $1.09 a share 15 days away from its upcoming earnings release on July 24, 2025.
Blackstone Inc.'s Earnings ESP sits at +0.50%, which, as explained above, is calculated by taking the percentage difference between the $1.09 Most Accurate Estimate and the Zacks Consensus Estimate of $1.08. BX 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.
BX is just one of a large group of Finance stocks with a positive ESP figure. Agree Realty (ADC) is another qualifying stock you may want to consider.
Agree Realty is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on July 31, 2025. ADC's Most Accurate Estimate sits at $1.07 a share 22 days from its next earnings release.
For Agree Realty, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.06 is +0.47%.
BX and ADC'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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Blackstone Inc. (BX): Free Stock Analysis Report Agree Realty Corporation (ADC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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