Core Insights - Investors seek stocks that can outperform market expectations ahead of earnings season, focusing on high-quality stocks [1] - Positive earnings surprises are crucial as stocks often decline if they miss or merely meet expectations, regardless of nominal earnings growth [2][3] - A significant earnings surprise can lead to a substantial increase in stock price immediately after the earnings release [4] Stock Selection Criteria - Stocks with a last EPS surprise of at least 10% are more likely to surprise again [7] - An average EPS surprise of over 20% in the last four quarters indicates strong potential for future earnings beats [8] - A Zacks Rank of 1 (Strong Buy) or 2 (Buy) is required for stocks to be considered [8][9] - Positive Earnings ESP is necessary for a stock to achieve an earnings beat [9] - Long-term growth potential is assessed through estimated EPS growth of over 10% per year and an average trading volume exceeding 100,000 [10] Highlighted Stocks - Doximity (DOCS): Zacks Rank 1, average earnings surprise of 26.00% over the past four quarters [11] - Life Time Group Holdings (LTH): Zacks Rank 1, average earnings surprise of 21.58% [12] - Adtalem Global Education (ATGE): Zacks Rank 1, average earnings surprise of 21.58% [13] - BioMarin Pharmaceutical (BMRN): Zacks Rank 2, average earnings surprise of 32.36% [14] - Iridium Communications (IRDM): Zacks Rank 2, average earnings surprise of 35.22% [14]
Buy These 5 Top-Ranked Stocks to Play Likely Earnings Beat